The Existence of Economies of Scale Can Create

question 67

Multiple Choice

The existence of economies of scale can create

• A) a natural monopoly.
• B) a government monopoly.
• C) a legal monopoly.
• D) a market in which many firms make identical products.

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Definitions:

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power and product differentiation.

Oligopolistic

Pertaining to a market structure characterized by a small number of firms controlling the majority of the market share, often leading to coordinated or interdependent market behavior.

Market Size

The total volume of sales or potential sales for a product or service within a particular market.

Product Differentiation

The act of differentiating a product or service to appeal more to a specific target audience, thereby making it stand out from competitors.