Which of the following statements is true?
A) Network effects arise because of economies of scale.
B) Economies of scale arise because of network effects.
C) Economies of scale act as barriers to entry into a market.
D) Network effects provide incentives for new sellers to enter the market.

Question

Quizplus · Accepted Answer

Economies of scale act as barriers to entry into a market because they allow established companies to produce goods or services at a lower cost than new entrants. This cost advantage can deter new companies from entering the market.

Which of the Following Statements Is True