How does MES affect seller concentration? Does it function as a systematic determinant of concentration?

• At MES output level, all economies of scale are exhausted. A firm cannot make any further cost savings through expansion. • If MESq = total demand (D), a single firm can serve the market, and the industry structure is monopolistic. • If MESq,1 + MESq,2 + … + MESq,N = total Demand, N firms serve the market, and the industry structure becomes perfect competition when N is large. It is a systematic determinant for concentration, as it can be applied generally to all industries.