1. Sources of monopoly power
A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry—that is, other companies cannot enter the market to create competition in that particular industry.
Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario.
|
Scenario |
Barriers to Entry |
|||
|---|---|---|---|---|
|
Exclusive Ownership of a Key Resource |
Government-Created Monopolies |
Economies of Scale |
||
| The Aluminum Company of America (Alcoa) formerly controlled all U.S. sources of bauxite, a key component in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late 19th century until the 1940s. | ||||
| In order to own and operate a taxi, drivers are required to obtain a taxi medallion. | ||||
| In the natural gas industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and, most likely, unprofitable for competitors to enter the market. | ||||
Grade It Now
In: Economics
Oil and gas workers have some of the most dangerous jobs in the country. In fact, according to the Bureau of Labor Statistics, about 4.2 percent of all oil and gas workers are hurt on the job each year. A great many of these incidents involve an oil rig accident, suffered off-shore on the decks or in the wells of a drilling operation. To help workers become more aware of the dangers and hazards associated with their job, company usually put helpful guide, noting common types and causes of oil field accidents, so these can be avoided and prevented. There are a number of types and kinds of oil rig injuries that can be suffered on the job. Some are due to negligence or error on the part of employers or co-workers, while others are simply a hazard of the oil and gas industry. Common types of oil field accident includes: burns, brain and head injuries, exposure to toxic fumes, amputations. Some of the common causes of oil field accidents are Gas leaks, High pressure in wells, Falling of objects, etc.Based on what you study in the course and understanding on above case study a. What are direct causes of accident and explain in details with an example related to acts and condition(2.5 marks each)
In: Civil Engineering
List the four non-income determinants of consumption and spending
In: Economics
6
Suppose a closed economy with no government spending or taxing initially. Suppose also that intended investment is equal to 200 and the aggregate consumption function is given by C = 200 + 0.50Y. And suppose that, if at full employment, the economy would produce an output and income of 3200
By how much would the government need to raise spending (G) to bring the economy to full employment?
7
Suppose a closed economy with no government spending which in equilibrium is producing an output and income of 2000. Suppose also that the marginal propensity to consume is 0.80, and that, if at full employment, the economy would produce an output and income of 3650
By how much would the government need to cut taxes (T) to bring the economy to full employment?
In: Economics
What are the effects of the rise in government spending on output and prices in the US economy in the short run in the 1960's
In: Economics
What are the four spending components of GDP? Include examples.
In: Economics
In: Economics
In: Economics
please be able to discuss government spending, taxation and borrowing
In: Economics
In: Economics