Even if production of a good is characterized by economies of scale,consumers of the good would be best served by having a large number of small firms produce the good because of the effects of increased competition.

Question

Quizplus · Accepted Answer

Economies of scale mean that as a firm increases its production, the average cost of producing each unit decreases. Therefore, consumers are often better served by fewer, larger firms that can produce goods more efficiently and potentially at a lower cost, rather than a large number of small firms that may have higher average costs.

Even If Production of a Good Is Characterized by Economies