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Essay

Economics

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Issue:

Business

 

Written by:

Victoria D

 

Date added:

August 7, 2014

 

Level:

University

 

Grade:

A

 

No of pages / words:

5 / 1254

 

Was viewed:

3498 times

 

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Essay content:

Australia is also very large and flat, which results in high domestic transport costs which must be added to the cost of production. The high sunk costs of establishing a business in this market also acts as an entry barrier, and since ACI is such a large producer it has the benefits of economies of scale...
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If a competitor was to enter the market ACI would be able to afford short term losses in order to run the competing firm out of business, thus retaining its market dominance. It is the combinations of these factors which have resulted in precluding the entry of other firms into the Australian glass production industry...
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