Respuesta :
Early market entrants who are successful in tying the consumer to the product through switching costs are benefiting from economies of scale.
What is economies of scale?
The phenomenon known as economies of scale occurs when the scale or magnitude of the products produced by a firm increases while the average cost per unit of output decreases. This is an illustration of a natural monopoly, in which there is only one effective number of businesses. A complex product like an automobile is produced using another form of scale economy. Numerous intricate processes make up the production process.
Why is economies of scale important?
Economies of scale result in larger profitability, and a higher return on capital invested, and give enterprises a platform to expand. Greater enterprise scale — As an enterprise expands, it solidifies and becomes less susceptible to external challenges, such as hostile takeover offers.
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