Answer to Question #49388 in Microeconomics for kristin

Question

Barriers to entering an industry:
i. result in productive efficiency
ii. result in allocative efficiency
iii. are the basis for monopolies to exist
iv. apply in the United States to only to industries dominated by a single firm
or both iii and iv.

A patent or copyright is a barrier to entry based on:
a. ownership of a key input used in the production process
b. large economies of scale as output increases
c.widespread network externalities
d.government action to encourage and protect private research and development efforts

A ‘natural’ monopoly, such as a local electricity provider, is the result of:
i. a firm owning or controlling a key input used in the production process
ii. long-run average total costs declining continuously as output increases
iii. long-run total costs declining continuously as output increases
iv. economies of scale existing over a wide range of output
ii and iv
or iii and iv

Answer 1

1. Barriers to entering an industry:
iii. are the basis for monopolies to exist
2. A patent or copyright is a barrier to entry based on:
d.government action to encourage and protect private research and development efforts
3. A ‘natural’ monopoly, such as a local electricity provider, is the result of:
iv. economies of scale existing over a wide range of output