Barriers to Entry - Explain how economies of scale
Question # 00410746
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Updated on: 10/21/2016 07:52 AM Due on: 10/21/2016
21. (Barriers to Entry) Explain how economies of scale can be a barrier to entry.??
22. (Allocative and Distributive Effects) Why is society worse off under monopoly than under perfect competition, even if both market structures face the same constant long-run average cost curve? ??
23. (Conditions for Price Discrimination) List three conditions that must be met for a monopolist to price discriminate successfully.
24. (Price Discrimination) Explain how it may be profitable for South Korean manufacturers to sell new autos at a lower price in the United States than in South Korea, even with transportation costs included
25. How did the De Beers cartel try to maintain control of the price in the diamond market? How was this control undermined? Briefly discuss.
26. Can the U.S. Postal Service be considered a monopoly in first-class mail? Why or why not? What has happened to the price elasticity of demand for first-class mail in recent years? Briefly discuss.
27. Explain why the marginal revenue curve for a monopolist lies below its demand curve, rather than coinciding with the demand curve, as is the case for a perfectly competitive firm. Is it ever possible for a monopolist’s marginal revenue curve to coincide with its demand curve?
28. Why would a monopoly firm never knowingly produce on the inelastic portion of its demand curve? Briefly explain.
29. Why do monopolies provide public utilities such as water and electricity? Briefly discuss.
30. Compare monopoly with perfect competition in terms of price and efficiency. Which market charges more? Which is more efficient?
22. (Allocative and Distributive Effects) Why is society worse off under monopoly than under perfect competition, even if both market structures face the same constant long-run average cost curve? ??
23. (Conditions for Price Discrimination) List three conditions that must be met for a monopolist to price discriminate successfully.
24. (Price Discrimination) Explain how it may be profitable for South Korean manufacturers to sell new autos at a lower price in the United States than in South Korea, even with transportation costs included
25. How did the De Beers cartel try to maintain control of the price in the diamond market? How was this control undermined? Briefly discuss.
26. Can the U.S. Postal Service be considered a monopoly in first-class mail? Why or why not? What has happened to the price elasticity of demand for first-class mail in recent years? Briefly discuss.
27. Explain why the marginal revenue curve for a monopolist lies below its demand curve, rather than coinciding with the demand curve, as is the case for a perfectly competitive firm. Is it ever possible for a monopolist’s marginal revenue curve to coincide with its demand curve?
28. Why would a monopoly firm never knowingly produce on the inelastic portion of its demand curve? Briefly explain.
29. Why do monopolies provide public utilities such as water and electricity? Briefly discuss.
30. Compare monopoly with perfect competition in terms of price and efficiency. Which market charges more? Which is more efficient?
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Solution: Barriers to Entry - Explain how economies of scale