Economies of scale can lead to an oligopolistic market structure because
A) if larger firms have lower costs, new small entrants will not be able to produce at the low costs achieved by the big established firms.
B) if economies of scale are insignificant, only a few firms are able to produce at the low costs achieved by the big established firms.
C) a few firms can force rivals to produce at low levels of output.
D) a few firms can use high profits to keep out new entrants.
Answer: A
You might also like to view...
All of the following are true if both the upstream and downstream firm have market power except which one?
A) Both the upstream firm and the downstream firm set a price that exceeds their respective marginal costs. B) If the two firms were to merge, the combined firm would earn the same profit than if they did not merge. C) This situation is referred to as a successive monopoly. D) This situation is referred to as double marginalization.
The long-run aggregate supply curve will shift to the right if the:
A. potential output of the economy expands. B. economy loses productive capacity. C. economy experiences a supply shock. D. profit levels of firms increase.
Define remittances
What will be an ideal response?
If a firm's marginal cost curve is very steep in the short-term, but much flatter in the long-term, all else equal a ________-term forecast is likely to be more valuable than a ________-term forecast.
A) short; long B) long; extended C) short; extended D) long; short