When a high fixed cost of production exists, markets are:
A) less likely to be monopolized.
B) more likely to be monopolized.
C) never monopolized.
D) always monopolized.

Question

Quizplus · Accepted Answer

High fixed costs of production often create economies of scale, where larger firms have lower average costs than smaller firms. This can make it difficult for new firms to enter the market and compete, leading to a greater likelihood of monopolization by existing firms.

When a High Fixed Cost of Production Exists, Markets Are