Answered: Monopolies exist because of barriers to…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter9: Monopoly

Section: Chapter Questions

Problem 27CTQ: For many years, the Justice Department has tried to break up large firms like IBM, Microsoft, and...

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Transcribed Image Text:Question 1 of 20 <> Attempt 2 Monopolies exist because of barriers to entry, obstacles that prevent other firms from entering an industry and competing for market share. For each case, indicate which barrier to entry applies. a. Coca-Cola's vast market share in the soft drink market: Network externalities Brand loyalty Control of a resource Legal barrier b. China's control of the market for rare earths (a group of minerals used to produce electronics): Economies of scale Network externalities Control of a resource Brand loyalty O Legal barrier

Transcribed Image Text:Question 1 of 20 > Attempt 2 c. Pfizer's control of the production of Viagra: Control of a resource Economies of scale Legal barrier Brand loyalty Network externalities d. The local utility company that can provide electricity to the entire market at a lower average cost than other producers: Control of a resource Brand loyalty Economies of scale Legal barrier Network externalities e. Facebook's position in social media:

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