A new company named Far Reach Inc. entered the radio retail business. In response, two incumbent radio retailers, Smooth Waves and Clear Signal, lowered the cost of their travel alarm radios and long-distance radios. Also, they spent more money to improve these radios. By doing this, Smooth Waves and Clear Signal
A. decreased industry exit barriers.
B. increased industry exit barriers.
C. decreased industry profit potential.
D. increased industry profit potential.
Answer: decreased industry profit potential.