25 economies of scale can lead to an oligopolistic

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Principles of Economics
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Chapter 17 / Exercise 6
Principles of Economics
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25) Economies of scale can lead to an oligopolistic market structure because A) if economies of scale are insignificant, only a few firms are able to produce at the low costs achieved by the big established firms. B) a few firms can force rivals to produce at low levels of output. C) if larger firms have lower costs, new small entrants will not be able to produce at the low costs achieved by the big established firms. D) a few firms can use high profits to keep out new entrants. Answer: C 25) Diff: 2 Page Ref: 461/461
Topic: Economies of Scale Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in oligopolies AACSB: Analytic Skills 26) A reason why there is more competition among restaurants than among large discount department stores is that restaurants C) unlike department stores, do not have significant economies of scale. 26)
D) unlike department stores, have to abide by government sanitation rules. Answer: C Diff: 2 Page Ref: 461/461 Topic: Economies of Scale Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in oligopolies AACSB: Analytic Skills 27) One reason why, in the last four decades, the number of new auto makers in the world has been very small compared to the past is that C) the automobile cannot be improved upon in any way by new producers. 27)
D) new auto makers cannot obtain necessary inputs to produce new cars. Answer: A Diff: 2 Page Ref: 461/461 Topic: Economies of Scale Learning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in oligopolies AACSB: Analytic Skills 7
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Principles of Economics
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Chapter 17 / Exercise 6
Principles of Economics
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