If the minimum efficient scale of a firm is small relative to the demand for the good, then
A) many small firms can compete in the market.
B) several large firms will enter the market thereby reducing competition.
C) there will be no economic profits for any small firms, so no new firms will ever enter the market.
D) the firms already in the market have lower average total cost than any new firm entering the market.
A
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The above figure shows the marginal benefit from pollution for two firms
If both firms receive a marketable permit to pollute 25 units of pollution each, how much will each firm pollute and how much will a permit for one unit of pollution be worth?
If the demand curve facing the Acme Awl Company is tangent to its average total cost curve, all of the following statements are true except one. Which is the exception?
a. Economic profit is zero. b. A normal profit exists. c. Marginal cost must exceed marginal revenue. d. Acme has excess capacity. e. Firms have no incentive to enter or leave this industry.
Demand is said to be ___________ when the quantity demanded is very responsive to changes in price.
a. elastic b. unit elastic c. inelastic d. independent
Which of the following would cause aggregate demand to shift to the right?
A. Decreased government spending B. Increased income taxes C. Decreased consumer confidence D. Decreased corporate income taxes