n NISM Certifications
XV NISM Series XV
Medium

An industry with high barriers to entry, weak buyer bargaining power, few substitutes, and low competition would exhibit what characteristics?

Practice question from NISM XV Mock Test 7 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Low pricing power and high profit margins

  2. Strong pricing power and high profit margins

    Correct answer

  3. C

    Low pricing power and low profit margins

  4. D

    Strong pricing power and low profit margins

Why this is the answer

High entry barriers, weak buyer power, and few substitutes allow firms to charge premium prices, resulting in strong pricing power and high profit margins.

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