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.

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Definitions:

Narcissism

A personality trait characterized by an inflated sense of self-importance, need for admiration, and lack of empathy for others.

Learned Helplessness

A scenario where a person is burdened with feelings of inability to exert control, typically following a harrowing event or successive failures.

Confidence

The feeling of self-assurance arising from one's appreciation of one's own abilities or qualities.

Pessimistic Attitude

A mindset characterized by the expectation that negative outcomes will generally prevail over positive ones.