Suppose that minimum efficient scale as a percentage of U.S. consumption is 5 percent in industry X and it is 10 percent in industry Y. It follows that we would expect to find
A)fewer firms in industry Y than X.
B)fewer firms in industry X than Y.
C)bigger firms in industry Y than X.
D)bigger firms in industry X than Y.

Question

Quizplus · Accepted Answer

The minimum efficient scale is larger in industry Y (10%) than in industry X (5%), indicating that industry Y requires larger production to achieve efficiency, leading to fewer firms in industry Y.

Suppose That Minimum Efficient Scale as a Percentage of U