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Why Does the Economy of Scale Lead to a Monopoly

Question 163

Multiple Choice

Why does the economy of scale lead to a monopoly situation in the market?


A) Because it provides legal barriers to entry into this market
B) Because a new firm in this market will face high average costs and cannot compete
C) Because it gives control of natural resources to only one firm
D) Because network effects provide incentives for new sellers to enter the market

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