Question

Which of the following could be considered barriers to entry that would prevent potential competitors from entering a monopoly market? Select the two correct answers below.

Select the two correct answers below.

• patent and copyright laws

• few workers in the industry

• extremely high demand for a certain product

• ownership of a critical factor of production

Question 2

Which of the following is not a scenario that exhibits the characteristics of a legal monopoly?

That's not right.

A government erects barriers to entry into a market by prohibiting or limiting competition.

A company has control of a scarce resource.

A government allows a producer in a particular industry to become a regulated monopoly.

A utilities provider is allowed by the government to become a regulated monopoly for social benefit.

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Question 3

The perceived demand curve for the _______________ is _______________.

That's not right.

perfectly competitive firm; also the market demand curve

perfectly competitive firm; downward sloping

monopolist; upward sloping

monopolist; also the market demand curve

Which of the following is not a condition that leads to a natural monopoly?

That's not right.

Economies of scale are large relative to quantity demanded.

Marginal cost of adding an additional customer is high.

A single producer can serve the entire market more efficiently.

Quantity demanded is less than minimum quantity it takes to reach the bottom of the long-run average cost curve.

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Which of the following gives the inventor the exclusive legal right to make, use, or sell his invention for a limited time?

That's not right.

copyright

trademark

patent

partnership

The perceived demand curve for a monopoly is downward sloping because a monopoly ____________.

That's not right.

is a price taker

can require consumers to purchase its product

can decide the market price.

is one of many firms in a market

Answer 1

1) There are many barriers to entry such as economies of scale, ownership of key resources, natural monopolies, licensing, patents, copyrights, trademarks, that would prevent potential competitors from entering a monopoly market. Select patent and copyright laws and ownership of a critical factor of production

2) Among the characteristics of a legal monopoly, government proposal to form a public provision is included. The monopoly is granted ownership over a particular sectors to restrict competition by providing licensing. Select A company has control of a scarce resource.

3) The perceived demand curve for the monopolist is also the market demand curve. This is because a monopolist is the sole supplier in the market so its demand function is the demand function of the entire market.

4) Marginal cost of adding an additional customer is very low actually so this is not a condition that leads to a natural monopoly

5) It is the patent that gives the inventor the exclusive legal right to make, use, or sell his invention for a limited time which can be extended to 20 years.

6) The perceived demand curve for a monopoly is downward sloping because a monopoly can decide the market price.