Given the Industry Structure in the Automobile Business, Entering the Auto

question 98

Multiple Choice

Given the industry structure in the automobile business, entering the auto manufacturing industry doesn't seem advisable.Yet Tesla Motors is joining the fray.Rather than attempting to compete head-on in internal combustion engines, Tesla Motors is entering the all-electric car segment, a much less crowded niche in the overall car industry.Which of the following is Tesla most hoping to benefit from in this market niche?

• A) Network effects
• B) Economies of scale
• C) Customer switching costs
• D) Capital requirements

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