Chapter 41: 2. A larger scale of operation does introduce
economies of scale (and thus lowers prices).
This, however, is not infinitely true. There is a
Minimum Efficient Scale - MES - beyond which
prices will begin to rise due to monopolization of
the markets. This MES was empirically fixed at
10% of the market in any one good or service. In
other words: companies should be encouraged to
capture up to 10% of their market (=to lower
prices) and discouraged to cross this barrier, lest
prices tend to rise again.
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