Give 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?

Give 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?

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter10: Strategy: The Quest To Keep Profit From Eroding

Section: Chapter Questions

Problem 3MC

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Similar questions

Which of the following is NOT an entry barrier related to technology?
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?
Offer one example of a barrier to entry created by the market (as opposed to being created by the market). Explain why your example serves as barriers to entry.
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
Answer the following: Patents awarded to pharmaceutical firms serve as barriers to entry. Why would the government create a barrier to entry for these companies? After the patent held for a name brand pharmaceutical expires, competitors can produce identical generic drugs. Even after generics are introduced, name brand pharmaceuticals often remain significantly cheaper. Explain how a firm can continue to charge more for a name brand drug.
Google dominates online search options and advertising. Some contend Google is a monopoly. First, consider competition and answer these questions: Is Google protected by a barrier to entry, and If so, which barrier(s)? Is there a viable substitute for Google? Second, consider whether Google is a monopoly or not. How does Google’s control of the market influence market price and market quantity? If Google is a monopoly, how would breaking up affect the market price and market quantity? How do we test these hypotheses?
How does the monopoly determine the level of output that maximizes profit? Group of answer choices By determining where marginal revenue is equal to marginal cost. A monopoly does not need to calculate where maximum profit occurs because they have no competition and can set any price they want for their product. By determining where total revenue equals marginal cost. By multiplying price by marginal cost.
Name a firm of business that is selling a good or item that is not so unique. However, in the local market, it's able to enjoy monopoly power. Although it's a monopoly, you don't see other firms entering the market. Name one possible entry barrier that could be keeping other firms from entering and competing with the suggested business.
Why is monopoly considered as a price maker?
Does a monopolist have a supply curve? Explain your answer. What are the different types of price discrimination? Differentiate between an oligopoly and a monopolistic competition (i.e. number of firms and the degree of product differentiation). How are skilled and unskilled workers in an economy likely to be affected if the firms adopt skill-biased technologies?
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