A scale curve slope in a particular industry that is quite steep indicates that:
A)first movers in a fast-growing market will end up with a cost disadvantage.
B)first movers in a fast-growing market will secure a widening cost advantage.
C)the firms in that industry will have a low cost per unit production.
D)the output of the firms will not be able to meet the minimum efficient scale.

Question

Quizplus · Accepted Answer

A steep scale curve slope indicates that the industry has economies of scale, meaning that as the production quantity increases, the cost per unit decreases. This gives first movers in a fast-growing market a widening cost advantage as they are able to achieve a lower cost per unit compared to later entrants.

A Scale Curve Slope in a Particular Industry That Is