Economies of scale are an example ofQuestion 6Answera.a government-created barrier to entry.b.a natural barrier to entry.

Question Analysis

The question asks about economies of scale and how they relate to barriers to entry in the context of economics.

Understanding Economies of Scale

Economies of scale refer to the cost advantages that a business can achieve due to the scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Barriers to Entry

In the context of market entry, barriers to entry are obstacles that make it difficult for a new competitor to enter a market. These can be categorized as:

1. Natural Barriers: These arise from the inherent characteristics of the industry, such as the need for substantial investment or established companies benefiting from economies of scale.
2. Government-Created Barriers: These are imposed through legislation, licenses, patents, tariffs, or regulations that make it difficult for new entrants to compete.

Conclusion

Economies of scale are primarily a natural barrier to entry, as they stem from the characteristics of the market that naturally favor larger firms with established operations. Thus, the correct answer to the question is:

Final Answer: b. a natural barrier to entry.