Answered

Which of the following is the best example of a barrier to entry created by a firm's incumbency advantages?
OA company engaging in extensive advertising to gain consumer loyalty
OA company which manufactures its products in high volumes
OA company that is marked by overcrowded distribution channels
A company with high levels of brand equity

Verified Answer :

GinnyAnswer

Final answer:

Incumbency advantages like brand equity can act as a barrier to entry for new firms in the market.


Explanation:

Incumbency advantages create barriers to entry for new firms in the market. One example is when a company with high levels of brand equity establishes brand loyalty through advertising, making it difficult for new competitors to enter and compete effectively. This hinders market entry as new firms would require significant resources to establish a similar level of brand recognition.


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