Large oligopoly firms are often able to take advantage of significant economies of scale.As a result,they can often produce at a lower average total cost than can smaller firms.

Question

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Large oligopoly firms have the advantage of economies of scale which allow them to produce larger quantities of goods or services at a lower unit cost. This makes it difficult for smaller firms to compete on price and can lead to increased market power for the larger firm.

Large Oligopoly Firms Are Often Able to Take Advantage of Significant