Economies of scale will create a barrier to entry in an oligopoly when
A) a firm's minimum efficient scale occurs where long-run average total costs are constant.
B) the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a large fraction of total industry sales.
C) the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a small fraction of total industry sales.
D) the industry's four-firm concentration ratio is less than 40 percent.
Answer: B
You might also like to view...
The demand curve for a monopoly firm
A) lies below its marginal revenue curve. B) is perfectly inelastic. C) is the same as the market demand curve. D) is horizontal.
An increase in ________ shifts the production function ________, and makes it possible to produce a higher level of GDP with ________ capital per hour worked
A) technology; down; the same amount of B) consumption; up; a lesser amount C) technology; up; the same amount of D) labor productivity; down; the same amount of