Unformatted text preview: For example if the minimum efficient scale is small in relation to the size of the market, a large number of firms operate in the market. The firms will be likely to behave in a perfectly competitive manner due to the large number of competitors. Inversely, if the MES is large in relation to the market size, it is predicted that there aren’t that many operating firms in the market....
View Full Document
- Fall '11
- Economics, Average cost, minimum efficient scale