New entrants forced to enter an industry at a larger scale than they would have preferred are facing a barrier known as
A) competitive rivalry
B) an investment hurdle
C) economies of scale
D) a network effect

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages that firms experience when they operate on a larger scale, such as lower unit costs of production. This can make it difficult for new entrants to compete if they are forced to enter the industry at a larger scale than they would have preferred, as they may not be able to achieve the same economies of scale as existing firms. This is often referred to as a barrier to entry.

New Entrants Forced to Enter an Industry at a Larger