Question

Which of the following conditions generally raise the barriers to entering an industry?

A. High industry growth rate
B. Low capital requirements
C. Low economies of scale
D. Low product differentiation
E. Strong brand loyalty among consumers

Answer 1

Barriers to entry in an industry can be raised by high industry growth rate, strong brand loyalty among consumers, and low product differentiation.

Step-by-step explanation:

Barriers to entry are factors that make it difficult for new firms to enter an industry. They can be government-enforced or arise from other market forces. In this case, the conditions that generally raise the barriers to entering an industry are:

1. High industry growth rate: When an industry is experiencing high growth, existing firms can quickly capture market share and establish themselves, making it difficult for new entrants to compete effectively.
2. Strong brand loyalty among consumers: When consumers are loyal to particular brands, it becomes challenging for new entrants without well-established brand names to attract customers and gain market share.
3. Low product differentiation: If products in an industry have minimal differences, it can be hard for new entrants to convince customers to switch from existing offerings.