Economies of scale can act as a barrier to entry for both monopolists and oligopolists.

Question

Quizplus · Accepted Answer

Economies of scale occur when the cost per unit of output decreases as the quantity of output increases. This can lead to lower costs for dominant firms, making it difficult for new firms to enter the market and compete effectively. As a result, economies of scale can act as a barrier to entry for both monopolists and oligopolists.

Economies of Scale Can Act as a Barrier to Entry