Economies of scale in production act as a source of ________ market power.
A) legal
B) natural
C) competitive
D) regulated

Question

Quizplus · Accepted Answer

Economies of scale in production refer to the cost advantages that a firm gains by producing at a larger scale. This creates a natural market power as the larger firm can offer lower prices due to the lower per-unit cost of production, which can make it more difficult for smaller firms to compete. This market power is not a result of any legal or regulatory protection, nor does it necessarily reflect a lack of competition in the market.

Economies of Scale in Production Act as a Source of ________