Why would entrepreneurs fail to create big businesses with naturally small-scale operations?

Thomas McCraw, at the time a professor at the Harvard Business School, wrote: Throughout American history, entrepreneurs have tried, sometimes desperately, to create big businesses out of naturally small-scale operations. It has not worked. What advantage would entrepreneurs expect to gain from creating big businesses? Why would entrepreneurs fail to create big businesses with naturally small-scale operations? Illustrate your answer with a graph showing long-run average costs.


 

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