ECO 1104 Chapter 15: Chapter 15

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: Lawrence Harris

Document Summary

Refer to principle governments can sometimes improve market outcomes . Barriers to entry a monopoly is the only seller in its market because other firms can"t enter. 3 main sources of barriers to entry: monopoly resources a key resource is owned by a single firm. This monopoly is rare due to the global economy. Ex) one well in a town owned by a single person: government-created monopolies the government gives a firm exclusive rights to produce a certain good. Ex) patent and copyright laws: pharmaceutical company getting a patent for a unique drug. These laws are meant to motivate researchers and authors to do more work. The laws are viewed in the public interest. Cost: monopoly pricing: natural monopolies a single firm can produce output at a lower cost than a larger group. Arises when there are economies of scale over the. Difference between the two is a monopoly"s ability to influence the price of its output.