PRINCIPLES OF MICROECONOMICS (OER)
PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
Textbook Question
100%
Chapter 9, Problem 1SCQ

Classify the following as a government-enforced barrier to entry, a banker to entry that is not government-enforced, or a situation that does not involve a barrier to entry.

  1. A patented invention
  2. A popular but easily copied restaurant recipe
  3. An industry where economies of scale are very small compared to the size of demand in the market
  4. A well-established reputation for slashing prices in response to new entry
  5. A well-respected brand name that has been carefully built up over many years

Expert Solution & Answer
Check Mark
To determine

(a)

The classification of the situation based on the given categories.

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Economics Concept Introduction

Concept introduction:

Barrier to entry The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

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Students have asked these similar questions
Classify the following as a government-enforced barrier to entry, a barrier to entry that is not government-enforced, or a situation that does not involve a barrier to entry. A patented invention A popular but easily copied restaurant recipe An industry where economies of scale are very small compared to the size of demand in the market A well-established reputation for slashing prices in response to new entry A well-respected brand name that has been carefully built up over many years A city passes a law on how many licenses it will issue for taxicabs A city passes a law that all taxicab drivers must pass a driving safety test and have insurance A well-known trademark Owning a spring that offers very pure water An industry where economies of scale are very large compared to the size of demand in the market
The barrier to entry that protects natural monopoly is   Question 2 options:   Better products.   Large economies of scale.   Large economies of scale.   None of the above.
Patents, Trademarks, and Copyrights... Group of answer choices   Allow individual innovators to form companies and possess monopoly power for 30 years   Allow innovators to possess monopoly power forever.   Provide limited monopoly power.   Allow innovative firms to achieve monopoly power for one year.

Chapter 9 Solutions

PRINCIPLES OF MICROECONOMICS (OER)

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