The market for a product has an extremely low minimum efficient scale. Which of the following is a valid conclusion about this market? A) There are unlikely to be many firms within this market.
B) No firms in this market will operate with decreasing returns to scale.
C) There is likely a low market concentration for this product.
D) The efficient range will be relatively small for this product.
E) In the short term, fixed costs are likely very high.

M. cotteleer electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. one of the components has an annual demand of 235 units, and this is constant throughout the year. carrying cost is estimated to be $1.25 per unit per year, and the ordering (setup) cost is $21 per order. a) to minimize cost, how many units should be ordered each time an order is placed? b) how many orders per year are needed with the optimal policy? c) what is the average inventory if costs are minimized? d) suppose that the ordering cost is not $21, and cotteleer has been ordering 125 units each time an order is placed. for this order policy (of q = 125) to be optimal, determine what the ordering cost would have to be.