Microeconomics A Contemporary Intro
10th Edition
ISBN: 9781285635101
Author: MCEACHERN
Publisher: Cengage
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Students have asked these similar questions
Explain how economies of scale can be a barrier to entry.
Which of the following is least likely to present a barrier to entry into a market?
A. Patent laws
B. Technological advantages
C. Economies of scale
D. Products are considered identical
If you were developing a product (like a web browser) for a market with significant barriers to entry, how would you try to get your product into the market successfully?
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- List several reasons that monopolies exist,and explain how each causes barriers to entryarrow_forwardClassify 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 marketarrow_forwardWhich of the following is not a barrier to entry? Select one: a.Licensing b.Large set up costs c.Long run increasing average costs d.Patent laws e.Economies of scalearrow_forward
- If patents reduce competition, why does the federal government grant them? The federal government grants patents A. to increase the number of close substitutes available. B. to prevent network externalities. C. to create natural monopolies. D. to encourage firms to collude. E. to encourage firms to spend money on research to create new products.arrow_forwardUnder what circumstances would a large size provide an advantage to a firm? How could it serve as a barrier to entry?arrow_forwardGive an example of entry barriers. Do entry barriers provide an opportunity for businesses to exploit consumers, or do entry barriers reflect businesses with sustained histories of providing good value to customers?arrow_forward
- Which of the following is not an artificial barrier to entry into a monopoly market? Answers: A. Patent B. Economies of scale C. Legal harassment D. Bundling productsarrow_forwardWhat is a barrier to entry? Give some examples.arrow_forwardOne of the sources of Monopoly market power is their Economies of Scale. What will happen when diseconomies of scale exist?arrow_forward
- T or F Firms seek to generate an effective barrier to entry. Why?arrow_forwardThe makers of Panax pain reliever do a lot of advertising and have very loyal customers. In contrast, the makers of generic paracetamol do no advertising, and their customers shop only for the lowest price. Assume that the marginal costs of Panax and generic paracetamol are the same and constant. (i) How might barriers to entry influence the behaviour of the makers of Panax?arrow_forwardWhy does monopoly arise?arrow_forward
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