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From course:

Economics A Level (DONEEEEEEE)

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Question:

Why can Economies of Scale lead to Monopoly Power?

Author: eric_galvao



Answer:

-When the Firm's AC falls, it can set a Lower Price. This undercuts their Opponents -The Firm thus gets a Bigger market Share as it Offers Products at Prices lower than their Competitors -Eventually, the Firm can Force all other Rivals out and become the only Supplier of the Product. Monopoly


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