One major barrier to entry under pure monopoly arises fromdiseconomies of scale.the availability of close substitutes for a product. patents.the price-taking ability of the firm.
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A pure monopoly exists when a single firm is the sole producer of a product or service, and there are no close substitutes available. Show more…
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'One major barrier to entry under pure monopoly arises from: Select one: The availability of close substitutes for a product b. Diseconomies of scale Ownership of essential resources The price taking ability of the firm'
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Which of the following is NOT a barrier to entry that would allow a monopolist to keep potential competitors out of its market? Significant economies of scale exist. The firm has government authorization to be a monopoly. The firm has a patent on the good or control over some resource required for the production of the good. The market price of the product is too high.
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A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for pharmaceutical products. Patents are granted to inventors of products or processes for a certain number of years to encourage innovation. Without patents, research and development needed to improve pharmaceutical products are unlikely to occur, as nothing would then prevent other firms from stealing ideas and copying products. Which of the following best explains the barriers to entry that exist in this scenario? (a) Exclusive ownership of a necessary resource (b) Legal barriers Increasing returns to scale (c) Increasing returns to scale
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