Question

In: Economics

1) Government regulation like licensing requirements create barriers to entry prevents new firms from developing and...

1) Government regulation like licensing requirements create barriers to entry prevents new firms from developing and marketing products and services. This is done presumably to ensure high standards for those industries that require licenses. However, often times it can create a dearth of individuals allowed to do the job. How stringent should licensing requirements be for the following groups:

  1. Physicians
  2. Attorneys
  3. Teachers
  4. Accountants
  5. Architects
  6. Taxi drivers

Discuss this with regard to market entry and exit, market power like monopolies and oligopolies, as well as with regard to complaints that licensing requirements often do not match the monetary gains of certain professions.  

2) Think of an industry that has only a small handful of competitors in the market. How do these types of organizations maintain market dominance?  What risks do the individual firms in your chosen industry take in an oligopoly dominated industry?

Solutions

Expert Solution


Related Solutions

Explain how barriers to entry created by high-tech firms differ from barriers to entry created by...
Explain how barriers to entry created by high-tech firms differ from barriers to entry created by traditional manufacturing industries such as steel and automobiles.
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...
Which of the types of barriers to entry 1-7, 1) barriers created by government (e.g. professional...
Which of the types of barriers to entry 1-7, 1) barriers created by government (e.g. professional licenses for electricians, patents, the minimum wage); 2) economies of scale (e.g. Eversource); 3) essential input barriers (e.g. OPEC); 4) brand loyalties (e.g. Kleenex); 5) consumer lock-in (e.g. Microsoft); 6) network externalities (e.g. Verizon); and 7) sunk costs (e.g. Boeing and Airbus). above, is it ethical for a seller to use to maintain its market power, if not to use that market power to...
Which of the types of barriers to entry 1-7, 1) barriers created by government (e.g. professional...
Which of the types of barriers to entry 1-7, 1) barriers created by government (e.g. professional licenses for electricians, patents, the minimum wage); 2) economies of scale (e.g. Eversource); 3) essential input barriers (e.g. OPEC); 4) brand loyalties (e.g. Kleenex); 5) consumer lock-in (e.g. Microsoft); 6) network externalities (e.g. Verizon); and 7) sunk costs (e.g. Boeing and Airbus). above, is it ethical for a seller to use to maintain its market power, if not to use that market power to...
What prevents the female body from rejecting the embryo/fetus, as this is a new tissue developing...
What prevents the female body from rejecting the embryo/fetus, as this is a new tissue developing in her body that is genetically different from her own tissues?
firms use acquisition strategies to: Increase market power Overcome entry barriers to new markets or regions...
firms use acquisition strategies to: Increase market power Overcome entry barriers to new markets or regions Avoid the costs of developing new products and increase the speed of new market entries Reduce the risk of entering a new business Become more diversified Reshape their competitive scope by developing a different portfolio of businesses Enhance their learning as the foundation for developing new capabilities Think of College of business , Imagine they are to acquire another business. Answer the following: 1.What...
1) Entry of new firms into a perfectly competitive market lowers the profits of the existing firms.
True or false1) Entry of new firms into a perfectly competitive market lowers the profits of the existing firms.2) The airline and trucking industries are two examples of industries that were regulated becausethey were natural monopolies.3) One way that government can encourage the production of goods or services that haveexternal benefits is to subsidize the good or service.4) Because of free riders, a private, unregulated market would not produce the efficient quantityof a public good.
Question 1 : What effect does the entry of new firms have on the economic profits...
Question 1 : What effect does the entry of new firms have on the economic profits of existing firms in a monopolistically competitive market? Elaborate your answer with appropriate examples. Why a firm remains in business even by earning zero economic profit? Elaborate your answer. Question2: Elaborate the three most important characteristics of an oligopoly market. Give three examples of oligopolistic industries in Saudi Arabia. What is a patent? If a patent serves as barrier to entry, why do governments...
Question 1 : What effect does the entry of new firms have on the economic profits...
Question 1 : What effect does the entry of new firms have on the economic profits of existing firms in a monopolistically competitive market? Elaborate your answer with appropriate examples. Why a firm remains in business even by earning zero economic profit? Elaborate your answer.
1.) Existing producers are better off when barriers to entry exist for new producers, but consumers are worse off.
  1.) Existing producers are better off when barriers to entry exist for new producers, but consumers are worse off. Because of these competing effects, it is ambiguous whether a market is more or less economically efficient when barriers to entry exist. (Please address both sentences.) 2) A producer can charge a price far greater than marginal cost so long as barriers to entry prevent competitors from entering the industry.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT