Lu runs a company that manufactures satellites for commercial and government use It has few rivals. At the moment, the power of buyers, the power of suppliers, and the threat of substitutes are all low. Based on this information, what can Lu conclude? 1) The manufacturer is likely to see little profit until the power of buyers 2) In this scenario, suppliers are likely to create and sell effective substitutes 3) This firm is an example of near-perfect competition 4) The company is likely to be very profitable as long as the threat to entry is mproves low

4) The company is likely to be very profitable as long as the threat to entry is low

Explanation:

This is a type of imperfect competition, it is not an oligopoly because the power of suppliers is low, but it is not a monopolistic competition either because the threat of new substitutes a is also low (high barriers of entry).

But given the circumstances, I would guess that as long as only a few suppliers exist, they will be able to charge a very high price for their product resulting in high profits. Satellites are not very common products and only a few companies in the world are able to produce them due to technological constraints. They are also very expensive (they cost millions of $), and that reduces the number of potential clients to only a small number of governments and few corporations.

A balance exists between a small supply and a small demand, with a very high equilibrium price.