Economies of Scale Can Be a Barrier to Entry When

question 103

Multiple Choice

Economies of scale can be a barrier to entry when

• A)many investors are required in order to start a new firm.
• B)potential entrants do not have the expertise to run a firm that does large-scale production.
• C)potential entrants do not realize their costs would fall if they would just make a little investment.
• D)it is realized that entry into the market will increase input prices.
• E)it takes a very large capital investment to get average costs as low as those of firms already in the industry.

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