If economies of scale are relatively unimportant in an industry, the typical firm's long-run average total cost curve will reach a minimum at a level of output that is a ________ fraction of total industry sales.The industry will be ________.

Question

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If economies of scale are relatively unimportant in an industry, firms will not benefit significantly from increasing their output. Therefore, the long-run average total cost curve will not exhibit a steep slope that indicates significant economies of scale. As a result, the typical firm will reach its minimum efficient scale at a relatively small level of output compared to the total industry sales. This indicates a competitive industry structure, where numerous small firms can survive and operate efficiently without facing significant cost disadvantages due to their small scale of operation.

If Economies of Scale Are Relatively Unimportant in an Industry