Potential Entrants Are More Likely to Be Deterred from Actually

question 92

Multiple Choice

Potential entrants are more likely to be deterred from actually entering an industry when

• A)incumbent firms are willing and able to be aggressive in defending their market positions against entry.
• B)incumbent firms are complacent.
• C)buyers are not particularly price-sensitive and the industry already contains a dozen or more rivals.
• D)the relative cost positions of incumbent firms are about the same, such that no one incumbent has a meaningful cost advantage.
• E)buyer switching costs are moderately low because of strong product differentiation among incumbent firms.

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Definitions:

Budget Committee

A group responsible for developing and monitoring an organization's financial plan, including income and expenditures.

Management's Budgeting Goals

The financial and operational targets set by a company's management during the budgeting process.

Accounting Department

The division within a company that is responsible for managing financial transactions, records, and statements.

Service Firm

A business that provides intangible products or services to consumers or other businesses rather than physical goods.