The presence of significant scale economies in an industry implies that

Question

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Significant scale economies imply that to achieve the lowest possible cost per unit, a large share of the market is required by each firm. This means that smaller firms may struggle to compete and barriers to entry are likely to exist. This does not necessarily mean that the industry will behave as perfect competitors, and it does not necessarily imply that the industry is more efficient than others. The minimum efficient scale of operation may occur at low or high output levels, depending on the industry.

The Presence of Significant Scale Economies in an Industry Implies