How Do Economies of Scale Contribute to the Development of an Oligopoly

question 201

Multiple Choice

How do economies of scale contribute to the development of an oligopoly?

• A) Economies of scale make it legally difficult for new firms to enter.
• B) Economies of scale make small-scale producers inefficient.
• C) Economies of scale are based on control of a key resource, without which other firms cannot enter an industry.
• D) Economies of scale are guaranteed when a patent is granted.

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Definitions:

Minority Shareholder

An investor who owns less than 50% of a company's shares and therefore does not control decision-making processes.

Dissent Procedure

A legal process that allows a corporation's minority shareholders to object to certain corporate actions they disagree with.

Corporate Structure

The organization of different departments or units within a company, defining roles, responsibilities, and authority levels.

Market Value

The estimated amount for which an asset or service would trade in the marketplace at a given time.