High School

In an industry, the rivalry among existing competitors is high when:

A. Fixed costs are low and marginal costs are high.
B. Exit barriers are low.
C. Incumbent firms are highly committed to the business.
D. Industry growth is high.

Answer :

Final answer:

The rivalry among existing competitors in an industry is high when exit barriers are low.

Explanation:

In an industry, the rivalry among existing competitors is high when exit barriers are low. When exit from the industry is costly, it can make it difficult for new firms to enter, resulting in reduced competition. For example, if a firm has substantial initial outlays that will be lost upon exit, it will be less likely to try penetrating the market, which can contribute to the monopoly power of established firms.