Question

In: Economics

1. Three natural barriers to entry are control of resources, economies of scale, and licensing. economies...

1. Three natural barriers to entry are

control of resources, economies of scale, and licensing.

economies of scale, problems raising capital, and control of resources.

control of resources, patents and copyright law, and licensing.

control of resources, patents and copyright law, and economies of scale.

problems raising capital, patents and copyright law, and licensing.

2.

When customers face significant switching costs, the

supply for the existing product becomes more inelastic.

supply for the existing product is perfectly inelastic.

demand for the existing product becomes more inelastic.

demand for the existing product becomes neither perfectly elastic nor perfectly inelastic.

demand for the existing product is perfectly inelastic.

3.

Like a pure monopoly, an oligopoly is characterized by

free entry and exit in the long run.

free entry and exit in the short run.

significant barriers to entry.

a single firm selling a product with no close substitutes.

all firms in the market producing the socially efficient level of output in the long run.

Solutions

Expert Solution

1) economies of scale, problems raising capital, and control of resources.

Natural barriers are barriers that exist naturally in the market. These barriers includes control of resources, problems in raising capital, and economies of scale.

2) demand for the existing product becomes more inelastic.

Inelastic demand is an economics term. It refers to the number of demand changes with changes in price. A good is a price inelastic when changes in price don't have much of an impact on demand. Some traditional examples of inelastic goods are gas, water, tobacco, alcohol, food, and oil.

3) significant barriers to entry.

The firms under oligopoly may produce homogeneous or differentiated products. Examples of pure monopolies are rare, but they do exist Utility companies, such as water and electricity, in particular towns, Cell service providers in some countries. Professional sports teams (the Denver Broncos are the only professional football team in Denver)

Rahul Sunny answered 6 months ago
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