Answered: Explain how economies of scale can be a…

Business

Economics

Explain how economies of scale can be a barrier to entry.

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter10: Monopoly

Section10.1: The Theory Of Monopoly

Problem 2ST

See similar textbooks

Related questions

Q: Economics Supposes Monopharm wants to maximize profit, what quantity does it sell, what price does…

Q: Carl and Simon are two pumpkin growers who are the only sellers of pumpkins at the market. The…

A: Given:- Q=8400-800P MC=0.50 Here; Q=quantity of pumpkin P=Price of pumpkin Please find the image…

Q: what is the similarities between perfect competition and monopoly?

A: Perfect competition and monopoly markets, both two different market structures. however, there are…

Q: Explain using a two-dimensional graph how imperfect competition brings a loss of economic…

A: The imperfect competition causes loss of efficiency. The efficiency is achieved where the P = MC.

Q: Why might a firm have monopoly power even if it is not the only producer in the market?

A: The ability of a company to set the Price of a product is known as market power. Monopoly power is…

Q: In the town of Fargo there are two bakers, Alma and Blanca. Alma's bread tastes just like Blanca's –…

Q: Why does a monopoly arise? because of diseconomies of scale because entry to an industry is blocked…

A: Monopoly is a single seller in the market of the good with no substitutes.

Q: Why monopoly firm earns abnormal profit in the long run?

A: Monopoly firm is the single seller of its product without any close substitute which gives monopoly…

Q: Assuming the firms are Bertrand duopolists, what is likely to happen? Explain verbally?

A: In a Bertrand game, there exist only two firms producing an identical product and they choose the…

Q: Under what circumstances would a large size provide an advantage to a firm? How could it serve as a…

A: Barrier to entry refers to the situation where other firms are unable to enter in to the business…

Q: Assuming there is no collusion, what is the solution ?

A: Scenarios such as above, where two interesting players do not know what the other person's strategy…

Q: explain what happens to a monopoly firm operating in the long-run.

A: A monopoly is a single seller that has control over the market supply. This implies monopoly is a…

Q: in 3 paragraphs List, and briefly discuss, three possible barriers to entry for an industry, and…

A: A market is a place where the buyers and sellers interact with each other and the exchange of goods…

Q: What are the major characteristics of a firm competing under conditions of monopoly?

A: Some important characteristics of monopoly market are listed as follows.

Q: What is the relationship between economies of scale and a natural monopoly?

A: Economies of scale- Scale economies, where goods produced in larger quantities become cheaper and…

Q: 20. world? Which of the following, if true, would make finding a pure monopoly difficult in the real…

A: Monopoly is a type of market structure in which there is only a single seller in the market.

Q: (Barriers to Entry) Explain how economies of scale can be a barrier to entry.

A: Economies of scale may benefit a corporation as its production becomes more efficient. Companies can…

Q: If you were managing a monopoly, and small entrant tried to enter your market, explain why it might…

A: We show that monopoly is a type of màrket characterized by a single seller selling different…

Q: are there in the long-run equilibrium? There are () vendors in the long run. d) Suppose the city…

A: The correct answer is given in the second step.

Q: Compare and contrast the decision-making processes of a competitive firm versus a monopoly firm.

A: Perfect competition refers to the situation where there are many buyers and sellers exist in the…

Q: Consider the daily market for hot dogs in a small city. Suppose that this market is in long-run…

A: A perfectly competitive firm is a price taker and maximizes profit by producing at D=MC A monopoly…

Q: In contrast to the Sherman Act, the Clayton Act of 1914 a. was more general, outlawing monopoly or…

A: Hi Student, thanks for posting the question. As per the guidelines I can answer the first question.…

Q: If we allow the natural monopolist to charge a price that generates normal economic profit will that…

A: Normally the behavior of monopolist is regulated by government. It is common in the case of natural…

Q: Why might monopoly arise?

A: Monopoly is a form of market where there is barriers to entry and exit as there is only one seller.…

Q: From a societal point of view, can we claim that perfect competition and monopoly are equally…

A: Answer: Monopoly and perfect competition both are extreme forms of market structure, perfect…

Q: Which of the following is not a barrier to entry? Select one: a.Licensing b.Large set up costs…

A: The barrier to entry refers to a condition that prevents the firms from entering the market.

Q: How is monopoly different from perfect competition?

A: A market is a place where the buyers and sellers interacts with each other party and determines the…

Q: Are products with patents a monopoly? Would it be expensive for another company to replicate?

A: Monopoly is a market condition where there is a single seller. It sells a unique commodity in the…

Q: Can the absence of government intervention be a similarity between perfect competition and monopoly?

A: Perfect competition and monopoly are two types of market structures.

Q: How does monopoly compare with pure competition in terms of price, output, and efficiency? Explain.

A: (Q) How does monopoly compare with the pure competition in terms of price, output, and efficiency?…

Q: Explain Social cost under monopoly?

A: Under monopoly, the social cost refers to deadweight loss which is created because the monopolist…

Q: Which of the following is least likely to present a barrier to entry into a market? patent laws…

A: In economics, barriers to entry refers to the economic factor that prevent new firms from entering…

Q: Which of the following is NOT an entry barrier related to technology?

A: Barriers to entry are the obstacles that make it difficult for new firms to enter into existing…

Q: Suppose that Redeye's Game Emporium is in a market with imperfect competition. The graph below shows…

A: Firms in imperfect competition maximize profit by producing at a level where marginal revenue equals…

Q: With the aid of a diagram explain how a monopolist determines how much output to produce and what…

Q: Who would be willing to pay more for the right to use the McDonald’s name—an out-let located in the…

A: In a market, the brand name of a company or organization is used by the franchise firms to expand…

Q: List and explain three reasons for strong barriers to entry that make it difficult for new firms to…

A: In competitive firms, there are either no barriers to entry or very less barriers to entry that…

Q: How can cost advantage be used as a barrier to entry?

A: Cost advantage is the advantage or the capacity of a firm to produce any good at a lower cost than…

Q: Which of the following is not a barrier to entry for new firms in an industry? A. Economies of…

A: The barriers to entry are considered as an obstacle or hindrances that make entry into the market…

Question

Explain how economies of scale can be a barrier to entry.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Under what circumstances would a large size provide an advantage to a firm? How could it serve as a barrier to entry?
One of the sources of Monopoly market power is their Economies of Scale. What will happen when diseconomies of scale exist?
Classify the following as a government-enforced barrier to entry, a barrier to entry that is not governmentenforced, or a situation that does not involve a barrier to entry. a. A city passes a law on how many licenses it will issue for taxicabs b. A city passes a law that all taxicab drivers must pass a driving safety test and have insurance c. A well-known trademark d. Owning a spring that offers very pure water e. An industry where economies of scale are very large compared to the size of demand in the market
How is monopoly different from perfect competition?
Why does monopoly arise?
Why does monopoly arise? How does monopoly make profit and loss? Graphically explain
Aruna owns Pottery Plus, a small firm that produces terra cotta pots for sale in the Edmonton area. The graph above represents Aruna’s situation. Pottery Plus has two rival firms. Aruna is convinced that she dare not raise her price because her rivals will not raise their prices, and she dare not decrease her price because her rivals will simply match her lower price. a. What price does Aruna charge? $ b. What quantity does she produce? units produced c. If her marginal costs are MC1 is she producing the optimal output? d. If her marginal costs increase to MC2 will she reduce her output?
What is the relationship between economies of scale and a natural monopoly?
Please compare the difference in market equilibrium and its consequence between monopoly and market competition
Graphically shows how monopolist can earn profit in short-run
Why might a firm have monopoly power even if it is not the only producer in the market?
TotsPoses Inc., a profit-maximizing business, is the only photography business in town that specializes in portraits of small children. George, who owns and runs TotsPoses, expects to encounter an average of eight customers per day, each with a reservation price (shown in the following table). Assume George has no fixed costs, and his cost of producing each portrait is $12. a. How much should George charge if he must charge a single price to all customer? At this price, how many portraits will George produce each day? What will be his economic profit? b. How much consumer surplus is generated each day at this price? c. If George is very experienced and knows the reservation prices of each customer, how many portraits will he produce each day and how much economic profit will he earn? d. Assume George charges only 2 different prices. He know that customers with reservation prices above $30, will never use coupons and the customers with reservation prices below will always use…