Economies of scale and barriers to entry; large scale businesses that have exploited internal economies of scale may have a significant cost advantage over new rival suppliers.
Just because scale economies are so evident, this does not preclude smaler businesses from surviving and prospering in markets:
1. they may focus on selling to niche markets where demand is inelastic and profit margins are tougher.
2. they may emphasise non-price competition (innovation especially important) even if they cannot compete purely on grounds of cost per unit.
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