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 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

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Answer 1

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Chapter 9, Problem 1SCQ

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 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

Expert Solution & Answer

To determine

(a)

The classification of the situation based on the given categories.

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Economics Concept Introduction

Concept introduction:

Barrier to entry − The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

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A free market is one where decisions regarding what and how much to produce are made by the market itself. This market is made up of buyers and sellers negotiating prices for goods and services. It is generally accepted that there are four degrees of competition within a free-market system. These include perfect competition, monopolistic competition, oligopoly, and monopoly. One benefit of the free market is that it allows open competition among companies. Businesses must provide customers with high-quality products at fair prices with good service. If they don't, they lose customers to businesses that do. Select the degree of competition that best describes each listed industry or business based on the description.

Comparing Market Types Another Name for Firms Special Traits Number of Kind of Type of Market Barriers to Entry Producers Competition One None No entry possible Price-setter Only one firm Monopoly Primarily non-price competition Firms can collude and behave as a monopolist Medium barriers Oligopoly A few (difficult entry) N/A Non-price competition; price competition Product differentiation and branding Low barriers Monopolistic Competition Many (easy entry) Price-maker No barriers (free entry) Perfectly elastic demand Perfect A great many Price competition Price-taker Competition Using the chart above, if you were a buyer (consumer) which of the four market structures would you want to buy from? Explain the benefits that come from this level of competition.

Answer 2

Textbook Question

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Chapter 9, Problem 1SCQ

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 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

Expert Solution & Answer

To determine

(a)

The classification of the situation based on the given categories.

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Economics Concept Introduction

Concept introduction:

Barrier to entry − The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

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Answer 3

Textbook Question

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Chapter 9, Problem 1SCQ

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 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

Expert Solution & Answer

To determine

(a)

The classification of the situation based on the given categories.

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Economics Concept Introduction

Concept introduction:

Barrier to entry − The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

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Answer 4

Textbook Question

100%

Chapter 9, Problem 1SCQ

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 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

Expert Solution & Answer

To determine

(a)

The classification of the situation based on the given categories.

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Economics Concept Introduction

Concept introduction:

Barrier to entry − The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Textbook Question

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Answer 6

Textbook Question

100%

Answer 7

Expert Solution & Answer

To determine

(a)

The classification of the situation based on the given categories.

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Economics Concept Introduction

Concept introduction:

Barrier to entry − The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

Answer 8

Expert Solution & Answer

To determine

(a)

The classification of the situation based on the given categories.

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Economics Concept Introduction

Concept introduction:

Barrier to entry − The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

(a)

The classification of the situation based on the given categories.

Answer 12

Answer to Problem 1SCQ

A patent invention is a government enforced barrier to entry.

Answer 13

Explanation of Solution

A patent is a legal assurance by the government which allows the patent holder an exclusive right to use the invention. It acts as barrier to entry as no one else other than the patent owner can reap the benefits of the invention unless the owner decides to sell it or lease it to another party.

Answer 14

Economics Concept Introduction

Concept introduction:

Barrier to entry − The conditions or circumstances that prevent other firms from entering a particular industry are termed as barriers to entry. Such barriers can be either natural or government-enforced barriers.

Answer 15

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?

Answer to Problem 1SCQ

Explanation of Solution

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