Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 12 - Pure Monopoly - Review Questions: 1

Answer

a. Patents b. Economies of scale d. Government licenses

Work Step by Step

a. Patent legally prevent any other firms from duplicating a product whereby it creates monopoly b. Economies of scale: A large company will be able to provide goods at lesser prices due to economies of scale while new firms may not be able to do so and thus will be driven out of market eventually due to losses d. Government licenses: Government regulates the entry of new firms through licensing. The government only issues a stipulated number of licenses in a particular region which also creates barriers of entry.
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