A market is likely to tip when there are:
A) Strong economies of scale and low need for product variety
B) Weak economies of scale and low need for product variety
C) Weak economies of scale and high need for product variety
D) Strong economies of scale and high need for product variety
E) Entering a period of recession in the dot-com industry as a whole.

Question

Quizplus · Accepted Answer

Markets are likely to tip towards a monopoly or oligopoly when there are strong economies of scale because a few firms can produce at lower costs than many small firms. Additionally, a low need for product variety means consumers are more willing to converge on a single standard or product, further encouraging market concentration.

A Market Is Likely to Tip When There Are