1. Why are barriers to entry so important to obtaining monopoly power in a market?
2. Compare and contrast natural barriers to entry and government-created barriers to entry.
3. Explain why problems in raising capital constitute a natural barrier and not a government-created one.
4. In Alabama, it is illegal to hunt alligators without a license. The government limits the number of licenses that can be purchased each year. Assuming there is an unlimited supply of alligators in Alabama, what would happen to the price and quantity of alligator sausage if the government stopped limiting the number of these hunting licenses?
5. Some economists argue that a government-created monopoly in the medical field can be good for the overall growth of an economy, even though it does create deadweight loss. Support this argument.