The existence of economies of scale can create
A) a natural monopoly.
B) a government monopoly.
C) a legal monopoly.
D) a market in which many firms make identical products.

Question

Quizplus · Accepted Answer

Economies of scale occur when the cost per unit decreases as production increases. This can lead to a natural monopoly, where a single firm can supply the entire market at a lower cost than any combination of multiple firms.

The Existence of Economies of Scale Can Create