The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-Barriers to entry do not occur when:
A)economies of scale in production exist in an industry.
B)firms requires a professional license or franchise agreement.
C)the firm that introduces a product is granted a patent.
D)a firm controls a scarce resource.
E)diseconomies of scale in production exist in an industry.

Question

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7
 
-Barriers to entry do not occur when:
A)economies of scale in production exist in an industry. 
B)firms requires a professional license or franchise agreement. 
C)the firm that introduces a product is granted a patent. 
D)a firm controls a scarce resource. 
E)diseconomies of scale in production exist in an industry.

Quizplus · Accepted Answer

Diseconomies of scale occur when a firm or industry grows so large that the costs per unit increase. It does not create a barrier to entry but rather can make it easier for smaller, more efficient firms to enter the market.

The Figure Given Below Shows the Aggregate Demand and Supply