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Suppose the Widget Industry Experiences Significant Economies of Scale

Question 7

Multiple Choice

Suppose the widget industry experiences significant economies of scale. Which of the following is likely to be true?


A) The economies of scale will provide other firms an incentive to enter the industry.
B) Firms in the widget industry will make zero economic profits in the short run.
C) The economies of scale will form a natural barrier to entry in the widget industry.
D) Large economies of scale will provide the firms in the market an incentive to co-operate.

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