When the efficient size of a firm or plant is significantly smaller than the total size of an industry, there will usually be numerous efficient firms/plants in that industry, and a cost-leadership strategy based on economies of scale will be rare.

Question

Quizplus · Accepted Answer

If the efficient size of a firm or plant is significantly smaller than the total size of an industry, there will be few efficient firms/plants in that industry, and a cost-leadership strategy based on economies of scale may be possible for a large firm that can achieve significant economies of scale.

When the Efficient Size of a Firm or Plant Is