Food suppliers to large companies, such as Burger King, often give discounts that are not extended to smaller customers. This either directly or indirectly affects the factor of __________ that serves as a barrier to entry.

Question

Quizplus · Accepted Answer

Economy of scale refers to the cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale. Large companies like Burger King can negotiate better prices due to their large orders, which smaller competitors cannot match, thus creating a barrier to entry.

Food Suppliers to Large Companies, Such as Burger King, Often