weak price power vs high barrier to exit

问题如下：

What is the relationship between ease of entry and exit and pricing power?

选项：

A.

Greater ease of entry and exit reduces power of pricing.

B.

Greater ease of entry and exit rises power of pricing.

C.

Pricing power is reduced by greater ease of entry and is increased by greater ease of exit.

解释：

C is correct.

In industry with low or no-existent barriers to entry, companies have low pricing power because their marker share can be taken away by new competitors. Price wars and excess capacity are likely to come up because high costs of exiting. Pricing power is increased by greater ease of exit.

C是正确的。

本题考察的是行业的竞争的影响因素。

首先同学要注意，本题的前提是一个容易进出的行业背景。

当进入容易时，市场上竞争很激烈，所以定价权下降。但是当退出行业很容易时，行业过剩的产能就不用被迫留在行业里跟其他人竞争，退出后行业的留存者之间的竞争就没有那么激烈了，定价权可以上升一些。C对。A和B都错。

要注意不要把A和经济学中的完全竞争市场混淆（完全竞争市场就是行业可以自由进出，没有可比的更容易进出的情况了）。而本题的前提是一个行业是容易进入和退出的，那相比较而言，行业变得更容易进入时，竞争就更激烈，而退出更容易时，竞争就下降。