Competitive Pressures Stemming from the Threat of Entry Are Weaker

question 20

Multiple Choice

Competitive pressures stemming from the threat of entry are weaker when:

• A) the incumbents do not enjoy preferential access to distribution channels (e.g. ,securing adequate space on retailer shelves).
• B) strong network effects exist.
• C) the industry outlook is risky or uncertain.
• D) incumbent firms have little ability to leverage distributors,dealers,and/or retailers to retain their business.
• E) the nature of the industry entails few scale economies.

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Definitions:

Robert Heilbroner

An American economist known for his works on the history of economic thought and capitalism.

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Supremacy Clause

A clause in the U.S. Constitution declaring that federal law takes precedence over state law if there is a conflict between them.

Federal Law

Federal law refers to the body of law created by the national government of a country, which applies to the entire country and takes precedence over state or local laws.