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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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Students have asked these similar questions
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.
Chapter 10 Solutions
Managerial Economics: A Problem Solving Approach
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Similar questions
- Use the cost and revenue data to answer the questions. Quantity Price Total revenue Total cost 10 90 900 675 15 80 1200 825 20 70 1400 1025 25 60 1500 1250 30 50 1500 1500 35 40 1400 1850 If the firm is a monopoly, what is marginal revenue when the quantity is 25? MR= What is the marginal cost when quantity is 15? MC= If this firm is a monopoly, at what quantity will marginal profit be $0.00? Quantity= If this is a perfectly competitive market, which quantity will be produced? Quantity=arrow_forwardCompared to perfect competition there is a social cost under monopoly do you agree? Explain using illustrationsarrow_forwardCompare the market structure of monopoly to perfect competition.how do they differarrow_forward
- State whether the following statements are true or false, and explain why. a. Perfectly competitive firms have no control over the price they charge for their product. b. For a natural monopoly, average cost declines as the number of units produced increases over the relevant output range. c. An oligopolist has a larger than average portion of total market share without having to do any advertising.arrow_forwarde) Describe how monopoly is different from perfect competition in terms of characteristics,optimal conditions, and market and firm conditions.arrow_forwardThe graph below represents sales per week of ABC Inc. Ltd, a monopoly multinational enterprise that supplies Hi-tech components. Use the graph to answer the questions that follow. "image" i. State the elasticity of the monopoly firm demand curve. ii. Considering the figure, examine the benefits of the characteristics of themonopoly demand curve to ABC Inc. Ltd. iii. Suppose the demand and cost curves result in ABC Inc. Ltd earning aneconomic profit. Do you think ABC Inc. Ltd firm will earn profit in the longrun? Explain your answer. Assume all factors constant. iv. Examine the effects of ABC Inc. Ltd on consumers.arrow_forward
- 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?arrow_forwardThe graph below shows the Market conditions of Honey’s Laundry service, which is the only laundry in Banani Residential Area. Considering the shop as a Monopoly market, answer the following questions: (a)In order to maximize profit, how many clothes does the shop clean ? (b)If the opening of five new laundry turns it into a perfectly competitive market, what should be the price Sunny’s laundry be charging now? (c)Compute the change in total revenue between part a and part b.arrow_forwardWhat does a firm that is a natural monopoly derive its market power from? Group of answer choices A. Control over a natural resource, like diamonds or crude oil B. Constantly increasing fixed costs C. Patents and other legal protections for innovative products D. Declining average cost for all levels of demandarrow_forward
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