The threat of new entrants is high when it is:

A Hard for customers to enter the market
B Hard for competitors to enter the market
C Easy for competitors to enter the market
D Easy for customers to enter the market

Correct Answer: Easy for competitors to enter the market

The threat of new entrants is high when it is Easy for competitors to enter the market. A high threat of new entrants makes an industry less attractive – there are low barriers to entry. Therefore, new competitors are able to easily enter into the industry, compete with existing firms, and take market share. There is a reduced profit potential as more competitors are in the industry.
Bissoy MCQ
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