Answer: C. In industries with a strong economies of scale, efficiency tend to increase as the number of firms decrease. As each firm increases its output, it's cost per unit fall. This means that fewer firms each producing higher output leads to greater efficiency than more firms each producing lower output.
Step-by-step explanation:
Economies of scale refers to the cost savings made as a result of more production occurring. In other words, efficiency leads to costs decreasing as production increases.
In an industry with strong economies of scale therefore, efficiency will increase as the number of firms decreases because this will allow the remaining firms to increase their production and enjoy economies of scale.