Asked by Jelani Sambury on Sep 24, 2024
Verified
Even if there are significant barriers to entry,firms may not be highly profitable
A) Substitute product offerings among rivals
B) The ability of consumers to switch to substitute products easily
C) All of the above
D) None of the above
Substitute Product Offerings
Products or services that a consumer might buy to satisfy the same basic need or want as another product.
Barriers To Entry
Factors that make it difficult for new firms to enter a market, such as high startup costs, strict regulations, or strong brand loyalty for existing products.
- Identify dynamics affecting profitability in spite of barriers to entry, such as substitute products and industry growth rate.
Verified Answer
CP
Christopher Perez5 days ago
Final Answer :
C
Explanation :
Even if there are significant barriers to entry, firms may not be highly profitable due to the presence of substitute product offerings among rivals and the ability of consumers to easily switch to those substitutes. These factors can create intense competition and limit pricing power, ultimately reducing profitability.
Learning Objectives
- Identify dynamics affecting profitability in spite of barriers to entry, such as substitute products and industry growth rate.
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