Question

Economist Michael Porter argues that if new firms threaten to enter, then ________?

Answer 1

Economist Michael Porter argues that if new firms threaten to enter, then existing firms may experience financial losses, layoffs, and even bankruptcy. However, protecting existing firms by blocking new technologies or products is generally opposed. Instead, government support in terms of retraining programs, acquiring additional skills, and research and development efforts is preferred.

Step-by-step explanation:

According to economist Michael Porter, if new firms threaten to enter an industry, then existing firms may experience financial losses, layoffs, and even bankruptcy. However, most people in market-oriented economies oppose blocking new technologies or products that lower the cost of services.

Instead of protecting existing firms, many argue for government support in the form of retraining programs, acquiring additional skills, and research and development efforts to help other firms compete with the new entrants. Disruptions due to technological change are viewed as a necessary cost that society should bear.