Industries in which firms have high fixed costs and low marginal costs are likely to have a:
A)large number of small firms.
B)small number of large firms.
C)large number of large firms.
D)small number of small firms.

Question

Quizplus · Accepted Answer

High fixed costs and low marginal costs give rise to economies of scale, meaning that average costs fall as output rises. As a result, small firms will find it difficult to compete with large firms.

Industries in Which Firms Have High Fixed Costs and Low