2. (Barriers to Entry) Explain how economies of scale can be a barrier to entry.If a firm’s long-run average cost curve slopes downward throughout the range of market demand, a single firm can produce at a lower average cost than any other firm that tries to enter the market. As firms compete to increase their market shares by expanding and thus lowering cost and price, a single firm emerges naturally from the process. Any new firm trying to enter the market is unable to match the monopolist’s economies of scale and, therefore, is unable to match the monopolist’s price.