ACTG 2010 Chapter 13: ch 13

• School: York University
• Department: Accounting
• Course: ACTG 2010
• Professor: Douglas Kong

Document Summary

Monopoly: a market: that produces a good or service for which no close substitutes exist, in which there is one supplier that is protected from competition by a barrier preventing the entry of new firms. Natural barrier to entry: creates a natural monopoly: natural monopoly: an industry in which economies of scale enable one firm to supply the entire market at the lowest possible cost. In a natural monopoly, economies of scale are so powerful that they are still being achieved even when the entire market demand is met. The lrac curve is still sloping downward when it meets the demand curve. Ownership barrier to entry: if one firm owns a significant portion of a key resource. Legal barrier to entry: creates a legal monopoly: legal monopoly: a market in which competition and entry are restricted by the granting of a public franchise, government licence, patent, or copyright.