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

Answer: Option C

Solution(By Examveda Team)

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.