Competitive pressures associated with the threat of entry are weaker when:

• A. existing firms have little brand loyalty
• B. barriers to entry are high
• C. new entrants can easily access distribution channels
• D. start-up costs for new firms are low

Answer: (B)

Verified step by step guidance

1. Understand the concept of 'threat of entry' in microeconomics, which refers to how easily new firms can enter a market and compete with existing firms.
2. Recognize that 'competitive pressures' from potential entrants increase when it is easy for new firms to enter the market, which can reduce the market power of existing firms.
3. Identify factors that make entry difficult, known as 'barriers to entry,' such as high start-up costs, strong brand loyalty, or restricted access to distribution channels.
4. Analyze the given options to determine which condition weakens the threat of entry by making it harder for new firms to enter the market.
5. Conclude that when 'barriers to entry are high,' the threat of entry is weaker, reducing competitive pressures on existing firms.