In the drug manufacturing industry, Gateway Labs is a company operating at massive economies of scale in the production of many drugs. Thus, a potential entrant into the industry will have a
A)much wider customer base.
B)higher level of production costs.
C)competitive advantage in pricing.
D)cheaper distribution system.

Question

Quizplus · Accepted Answer

Gateway Labs benefits from economies of scale, meaning they can produce drugs at a lower cost per unit due to their large scale of production. A new entrant would likely face higher production costs as they lack the same scale efficiencies.

In the Drug Manufacturing Industry, Gateway Labs Is a Company