Exploiting substantial scale economies is an explanation of why some industries come to be categorized as monopolistically competitive.

Question

Quizplus · Accepted Answer

Exploiting substantial scale economies is more characteristic of oligopolies or monopolies, where a few firms or a single firm can produce at lower average costs due to large-scale production. Monopolistically competitive markets are characterized by many firms producing differentiated products, not by scale economies.

Exploiting Substantial Scale Economies Is an Explanation of Why Some