Which of the following would most likely create the setting for an oligopoly? government grants Alex,...

Which of the following would most likely create the setting for an oligopoly?

	government grants Alex, Trent, and Alyse each a patent for their respective molybdenum based electric car batteries
	market demand is two or more times less than quantity needed to produce at the minimum of the AC curve
	market demand is two or more times more than quantity needed to produce at the minimum of the MC curve
	insurmountable technological difficulty associated with producing similar products acts as an effective barrier to entry

Intellectual property law is a body of law that includes

	the right of inventors to produce their inventions
	the right of inventors to sell their inventions
	trademark, patent and trade secret legislation
	copyright legislation, as well as all of the above

If monopolistic competitors must expect a process of entry and exit like perfectly competitive firms,

	they will be unable to earn higher-than-normal profits in the short run.
	they will wish to cooperate to make decisions about what price to charge.
	they will wish to cooperate to make decisions about what quantity to produce.
	they will be unable to earn higher-than-normal profits in the long run.

The two primary factors determining monopoly market power are the firm's

	revenues and size of its customer base
	demand curve and its cost structure
	variable cost curve and its fixed cost structure
	demand curve and level of wealth within its market

Solutions

Expert Solution

1. (a) government grants Alex, Trent, and Alyse each a patent for their respective molybdenum based electric car batteries.

An oligopoly is a market form wherein a market or industry is dominated by a small group of large sellers. If government grants exclusive patents to three firms, the patents will act as barriers to entry and the market will be concentrated.

2. (d) copyright legislation, as well as all of the above.

Intellectual property refers to the body of law that protects creative works, designs, and inventions.

3. (d) they will be unable to earn higher-than-normal profits in the long run.

If monopolistic competitors must expect a process of entry and exit like perfectly competitive firms, they will earn normal profits in the long run as in the case of perfect competition.

4. (b) demand curve and its cost structure.

Market power is the ability to affect the terms and conditions of exchange so that the price of a product is set by a single company (price is not imposed by the market as in perfect competition).

Rahul Sunny answered 1 year ago

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