How will high entry barriers into a market influence (a) the long-run profitability of the firms (b) the cost efficiency of the firms in the industry (c) the likelihood that some inefficient high-cost firms will survive and (d) the incentive of entrepreneurs to develop substitutes for the product supplied by the firms? Are competitive pressures present in markets with high barriers to entry? Discuss

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Tod ThielLv2

4 Jun 2018

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Related questions

1) A natural monopoly exists when:

a. A few firms collude to make one large firm

b. Firms enter the industry as a result of profit incentives

c. Economies of scale provide large cost advantages to having one firm produce the industry's output

d. Firms naturally maximize regardless of market structure

2) A(n) ____ is a single firm with ___, whereas a(n) ___ implies an industry with ____ firm(s) and ____ .

a. Monopoly; barriers to entry; oligopoly; few; no barriers to entry

b. Oligopoly; no barriers to entry; monopoly; many; easy entry and exit

c. Monopoly; barriers to entry; monopolistic competition; many; easy entry and exit

d. Monopolistic competitor; barriers to entry; monopoly; one; barriers to entry

3) In monopolistic competition:

a. Each firm produces a product identical to that of every other firm in the industry

b. Firms are aware of their strategic interdependence

c. Firms earn large economic profits in the long run

d. Firms earn zero economic profits in the long run

4) A monopolistically competitive industry, such as corn snack chips, and a perfectly competitive industry, like wheat farming, are alike in that:

a. There are many firms in each industry

b. Firms in both types of industries produce similar but not identical products

c. Barriers to entry in both industries are large

d. Firms in both types of industries produce identical products

byzantiumfish483

You have been hired as a consultant by your local mayor to look at the various market structures. Your role is to provide analysis and answers to these important questions that will help the mayor understand the structures of many of the businesses in his city: Describe each market structure discussed in the course (perfect competition, monopolistic competition, oligopoly, and monopoly) and discuss two of the market characteristics of each market structure. Identify one real-life example of a market structure in your local city and relate your example to each of the characteristics of the market. Describe how high entry barriers into a market will influence the long-run profitability of the firms. Explain the competitive pressures that are present in markets with high barriers to entry. Explain the price elasticity of demand in each market structure and its effect on the pricing of its products in each market. Describe how the role of the government affects each market structure's ability to price its products. Discuss the effect of international trade on each market structure.