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This results in many new entrants, which will effectively decrease profitability. Unless the entry of new firms can be blocked by incumbents, the profit rate will fall towards a competitive level (perfect competition).
the existence of barriers to entry (patents, rights, etc.)
economies of product differences
switching costs or sunk costs
access to distribution
absolute cost advantages
learning curve advantages
expected retaliation by incumbents
The intensity of competitive rivalry
For most industries, this is the major determinant of the competitiveness of the industry...
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