In an oligopoly,a firm's minimum efficient scale is large relative to the market.

Question

Quizplus · Accepted Answer

In an oligopoly, there are few firms in the market and each firm typically has a significant market share. Because of the limited number of firms, there is a high barrier to entry, and firms are able to achieve economies of scale. As a result, a firm's minimum efficient scale is typically large relative to the size of the market. This means that smaller firms are at a disadvantage and may not be able to compete effectively.

In an Oligopoly,a Firm's Minimum Efficient Scale Is Large Relative