Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 9, Problem 2SCQ
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.
- 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
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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
Round off your final answer to whole #.
A company produces and sells a consumer product and is able
to control the demand by varying the selling price. The approximate relationship between price and demand is
p=45 + 2700/D - 5000/D2 for D > 1
The company is seeking to maximize its profit. The fixed cost is $1,000 and the variable cost is $38 per unit.
What is the number of units that should be produced and sold each month to maximize profit?
09.
Chapter 9 Solutions
Principles of Economics 2e
Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Suppose the local electrical utility, a legal...Ch. 9 - If Congress reduced the period of patent...Ch. 9 - Suppose demand for a monopolys product falls 50...Ch. 9 - Imagine a monopolist could charge a different...Ch. 9 - How is monopoly different from perfect...Ch. 9 - What is a barrier to entry? Give some examples.Ch. 9 - What is a natural monopoly?Ch. 9 - What is a legal monopoly?
Ch. 9 - What is predatory pricing?Ch. 9 - How is intellectual property different from other...Ch. 9 - What legal mechanisms protect intellectual...Ch. 9 - In what sense is a natural monopoly natural?Ch. 9 - How is the demand curve perceived by a perfectly...Ch. 9 - How does the demand curve perceived by a...Ch. 9 - Is a monopolist a price taker? Explain briefly.Ch. 9 - What is the usual shape of a total revenue curve...Ch. 9 - What is the usual shape of a marginal revenue cuwe...Ch. 9 - How can a monopolist identify the...Ch. 9 - How can a monopolist identify the...Ch. 9 - When a monopolist identifies its profit-maximizing...Ch. 9 - Is a monopolist allocatively efficient? Why or why...Ch. 9 - How does the quantity produced and price charged...Ch. 9 - ALCOA does not have the monopoly power it once...Ch. 9 - Why are generic pharmaceuticals significantly...Ch. 9 - For many years, the Justice Department has tried...Ch. 9 - Intellectual property laws are intended to promote...Ch. 9 - Imagine that you ale managing a small firm and...Ch. 9 - If a monopoly firm is earning profits, how much...Ch. 9 - Return to Figure 9.2. Suppose P0 is 10 and P1 is...Ch. 9 - Draw the demand curve, marginal revenue, and...Ch. 9 - Draw a monopolists demand curve, marginal revenue,...
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- Whether in the case of clothes and cars or in the case of universities, producers spend a lot of money establishing their "brand names" because: Group of answer choices Brand names are established by driving out the competition, after which these companies charge monopoly prices. Government legislation raises the prices of brand named items with price controls, and people have no choice but to pay the higher price for brand name products. There are legal requirements for companies with brand names to spend a percentage of their budget on advertising. Brand names carry a reputation of better quality, and consumers will pay a higher price for brand names.arrow_forwardDistinguish between technical efficiency and economic efficiencyarrow_forwardWhich of the following is not a barrier to entry? Group of answer choices high fixed costs ownership of a resource diseconomies of scale regulation and legal feesarrow_forward
- Which of the following is not an example of an entry barrier? Group of answer choices Capital needed to start business. Government licensing or franchising. Low production costs. Strong brand recognition. All of the above are barriers to entry.arrow_forwardWhich of the following methods would help society deal with a monopoly? Method Drag appropriate answer(s) here Require the firm to lower the costs so the market price will fall. Regulate the socially efficient price and subsidize any loss to the firm. Increase tariffs on monopoly firms in other countries. Not a Method +# Shut down the firm. Prevent the firm from buying all possible competitors in the market. Drag appropriate answer(s) here +arrow_forwardsuppose a firms patent expires in this case the market price of the good/service will and the quantity sold willarrow_forward
- The Lead Zeppelin Company produces powered and steerable lighter-than-air craft. The company’s airships are specially lined and are therefore safer than normal dirigibles. The table below shows the weekly production of dirigibles, along with the associated Average Cost and Total Revenue figures (the Average Cost and Total Revenue figures are actually in thousands of dollars, so the $15 represents $15,000, but we have left off the zeros to save space). Quantity Average Cost Total Cost Total Revenue 0 -- 0 $0 1 $15 15 $10 2 $9 18 $20 3 $8 24 $30 4 $8.50 34 $40 5 $9 45 $50 6 $10 60 $60 7 $12 84 $70 The Lead Zeppelin Company has decided that it will produce at least 1 dirigible. Now the question becomes, how many more dirigibles should it produce to make as much profit as possible? Use the profit-maximizing rule to explain how many dirigibles the Lead Zeppelin Company should produce to…arrow_forwardIt refers to the factor or consideration exhibited by a company, service, product or brand as the reason that one product or service is different from and better than the others and that enables it to stand out from competitors.arrow_forwardWhat is the correct answer? I got this wrong.arrow_forward
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