If the Minimum Efficient Scale of a Firm Is Small

Multiple Choice

If the minimum efficient scale of a firm is small relative to the demand for the good, then

A) many small firms can compete in the market.
B) several large firms will enter the market thereby reducing competition.
C) there will be no economic profits for any small firms, so no new firms will ever enter the market.
D) the firms already in the market have lower average total cost than any new firm entering the market.