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...
Assume that the demand curve for sunblock is linear and downward sloping. Which of the following statements about the slope of the demand curve for sunblock and the price elasticity of demand for sunblock are true?
A) The slope is constant, but the price elasticity of demand is not constant at all points along the demand curve for sunblock. B) The slope of the demand curve for sunblock is constant and equal to zero; demand is perfectly inelastic. C) The slope is not constant, but the price elasticity of demand is constant at all points along the demand curve for sunblock. D) The slope and the price elasticity of demand are constant at all points along the demand curve for sunblock.
When international banks conduct daily trades of different currencies valuing in the millions of dollars
A) they are using the spot market. B) they are using the forward market. C) they are using the futures market. D) they are using the stock markets.