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Review Table 9 . 1 from your textbook, which is copied below. Choose one of the Barriers that has a role for government ( Number
Review Table from your textbook, which is copied below. Choose one of the Barriers that has a role for government Number or and answer the questions that follow.
tableTable Barriers to Entry,Barrier to Entry,Government Role?,Example Natural monopoly,tableGovernment often respondswith regulation or ownershipWater and electric companiestable Control of a physicalresourceNoDeBeers for diamonds Legal monopoly,Yes,tablePost office, past regulation ofairlines and truckingtable Patent, trademark,and copyrighttableYes through protection ofintellectual propertyNew drugs or softwaretable Intimidating potentialcompetitorsSomewhat,tablePredatory pricing; wellknownbrand names
a Why is government intervention needed? Are there inefficiencies or costs that might result if the monopolist were allowed to retain its monopoly position?
b Are there any benefits to society that might result from allowing the monopolist to retain its monopoly position? If so describe them.
c Briefly describe the nature of the government's role. Does it correct the problem you described in part
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