When will economies of scale create a barrier to entry in an oligopoly industry?
A) When a firm's minimum efficient scale occurs where long-run average total costs are constant.
B) When the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a large fraction of total industry sales.
C) When the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a small fraction of total industry sales.
D) When the industry's four-firm concentration ratio is less than 40 per cent.
Correct Answer:
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