Some economists observe that higher profit rates in large oligopolies stem from the greater efficiency arising from _____ in these large firms.

Question

Quizplus · Accepted Answer

Economies of scale refer to the cost advantages of producing on a larger scale. As large oligopolies produce on a large scale, they can take advantage of economies of scale such as bulk purchasing, division of labor, and specialization. This can lead to greater efficiency and higher profit margins.

Some Economists Observe That Higher Profit Rates in Large Oligopolies