Economies of scale can
A) result in an increasing cost industry.
B) cause firm exits out of the industry.
C) prevent the entry of new firms into a market.
D) reduce the rate of return which the firm may earn.

Question

Quizplus · Accepted Answer

Economies of scale can prevent the entry of new firms into a market because existing firms with large-scale operations can produce at lower costs, creating a barrier to entry for smaller or new firms.

Economies of Scale Can