Question

Product differentiation by incumbents act as an entry barrier because a. incumbents will take legal action if new entrants do not differentiate their products. b. it helps a firm to derive greater economies of scale. c. new entrants cannot differentiate their products. d. new entrants will have to spend heavily to overcome existing customer loyalties.

Answer 1

Answer:

d. new entrants will have to spend heavily to overcome existing customer loyalties.

Explanation:

When the product is different and can be recognized by an incumbent so the same should be acted as the entry barrier as the new entrants should spend more amount so that they would able to overcome the loyalties of the customer that are pre-existed in the market

So according to the given situation, the option d is correct

And, the remaining of the options should be incorrect