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IMANET CMA Exam - Topic 12 Question 123 Discussion

Actual exam question for IMANET's CMA exam
Question #: 123
Topic #: 12
[All CMA Questions]

The prospect for the long-term profitability of an existing firm is greater when

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Suggested Answer: A

The prospects of long-term profitability are contingent upon the industry's exit and entry barriers. The entry of new firms in market decreases the prospect for long-term profitability. When a firm operates in an industry that has a steep learning curve, it ios more difficult for new firms to enter the market. Thus, the prospects of long-term profitability are greater for an existing firm.


by Clemencia at Mar 30, 2026, 07:26 AM

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Son
18 days ago
Totally agree, option A makes the most sense!
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Olga
23 days ago
A steep learning curve can lead to better efficiency.
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Billy
1 month ago
Option D sounds plausible, but I wonder if it really guarantees long-term profitability. New products can also fail in the market.
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Miles
2 months ago
I remember a similar question where we discussed how government policies can impact market entry. Option C seems risky for existing firms.
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Valentine
2 months ago
I'm not sure about B. Low switching costs might actually make it easier for customers to leave, which could hurt profitability.
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Devora
2 months ago
I think option A makes sense because a steep learning curve can lead to lower production costs over time, right?
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