Question
1. Which market structures represent industries where a firm has little or no control over price? Which market structures represent industries where a firm may
1. Which market structures represent industries where a firm has little or no control
over price? Which market structures represent industries where a firm may have
considerable control over price? Which then are self-regulating industries? Which
may require government regulation?
2. Explain how easy entry and exit will result in economic profits of zero in the long
run. Which markets have easy entry and exit?
3. The long run result of pure competition is that the price=minATC=MC. Explain
the importance of this result and why the government looks favorably in most
cases on competition.
4. List the barriers to entry and give a short description of how the barrier creates the
monopoly.
5. Which barrier is considered a natural result of the industry's structure? Which are
considered the result of artificial barriers? When might monopoly be preferable to
competition?
6. Draw the graph from the lecture video which shows monopoly versus
competition. This graph assumes economies of scale are not a barrier. In other
words competition can get to the same long run low costs as monopoly. In words
say what are the effects of monopoly on price, output, and efficiency when
compared to competition?
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