survivor principle

survivor principle

the idea that competition between firms of different sizes will lead to the survival of the most cost-efficient firms, i.e. those firms that are able to produce at a level of output at least equal to the ‘minimum efficient scale’ (‘mes’) of operations. (See ECONOMIES OF SCALE.) Firms operating at the ‘mes’ scale for a market will tend to increase their market share at the expense of less efficient firms that operate on a sub-optimal scale until the latter are driven out of business.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005