When Will Economies of Scale Create a Barrier to Entry

question 92

Multiple Choice

When will economies of scale create a barrier to entry in an oligopoly industry?

• A)When a firm's minimum efficient scale occurs where long-run average total costs are constant.
• B)When the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a large fraction of total industry sales.
• C)When the typical firm's long-run average total cost curve reaches a minimum at a level of output that is a small fraction of total industry sales.
• D)When the industry's four-firm concentration ratio is less than 40 per cent.

---

Definitions:

Vocational Degree

A qualification awarded for the completion of education or training directly related to a specific trade or profession.

High School Degree

A certificate or diploma awarded upon successfully completing the required course of studies in a secondary school or high school.

College Degree

A degree conferred by higher education institutions to students who have shown proficiency in a particular area of study or professional field after finishing a prescribed program.

Deindustrialization

A social and economic change resulting from the reduction of industrial activity, especially manufacturing.