If the Minimum Efficient Scale in the Production of Rubber

question 89

Multiple Choice

If the minimum efficient scale in the production of rubber exceeds the quantity of rubber any individual tire producer buys,

• A)tire producers should integrate backward into rubber production
• B)there will be a monopoly in rubber production
• C)tire producers should not integrate backward into rubber production
• D)tire producers will be charged prices above what the cost of producing rubber themselves would be
• E)tire companies will switch to fiberglass