1. It is argued that monopoly pricing requires "barriers to entry".Otherwise, new firms would eventually erode the economic profits of the monopolist by entering the industry.Which of the following wouldnotbe considered a barrier to entry?

patents on a production process

cost advantages in production resulting from natural monopoly

exclusive ownership of essential raw materials

inefficiency due to bureaucratic decision-making procedures

technological superiority

2.The monopolist depicted in thediagramis producing at Q1 and selling at a price of P1.This firm:

is at a position of maximum total economic profit.

should not increase output, since price will fall, thus reducing total revenue.

should increase output if it wants to maximize profits.

is allocatively efficient since output is produced at minimum average cost.