Question

Competitive pressures associated with the threat of new entrants grow stronger when?

A. Existing firms have strong brand loyalty
B. Entry barriers are high
C. Potential entrants can easily access distribution channels
D. Capital requirements are low
E. The industry growth rate is slow

Answer 1

The competitive pressures associated with the threat of new entrants grow stronger when entry barriers are high, potential entrants can easily access distribution channels, and capital requirements are low.

Step-by-step explanation:

The competitive pressures associated with the threat of new entrants grow stronger when entry barriers are high, potential entrants can easily access distribution channels, and capital requirements are low.

High entry barriers make it difficult for new competitors to enter the market, reducing the threat of new entrants.

Meanwhile, easy access to distribution channels and low capital requirements make it easier for potential entrants to compete with existing firms, increasing the threat of new entrants.