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economies of scale

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Which of the following examples explains how high cost of entry prevents potential entrants from entering an oligopolistic market?

Brittney's Bakery makes chocolate chip cookies. She is a price taker in the market for baked goods.

Jim's Jumbo Shrimp Company sells a product for which there are no substitutes.

Sam's Seafood has a monopoly on bay oysters, so no other companies may enter the market.

John's Band-aid Company cannot compete with Johnson & Johnson due to economies of scale.

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John's Band-aid Company cannot compete with Johnson & Johnson due to economies of scale.

I will say this is the option because ...

Solution Summary

This solution analyzes economies of scale. The expert determines how to prevent potential entrants from entering oligopolistic market.

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