Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN: 9781337106665
Author: Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher: Cengage Learning
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Chapter 10, Problem 3MC
To determine

Entry barrier.

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A natural monopoly is most likely to occur in which of the following industries?   Group of answer choices a. the pharmaceutical industry because the development and approval of new drugs through the Food and Drug Administration can take more than 10 years b. the diamond mining and marketing industry because one firm can control a key resource c. the software industry because of the importance of network externalities d. an industry where fixed costs are very large relative to variable costs
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?
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.
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