Economics Homework Nine Answers - Student Thirteen

AllieT.

1. An example of an oligopoly is the soft-drink industry. The most popular soft drink companies are Coca- Cola and Pepsi. They have high barriers to entry because a new company cannot copy a soda that has already been produced and it is expensive to start a new company. Coca- Cola and Pepsi have similar products.

Superb example.

3. (1) Monopolistic competition

  (2) Perfect competition
  (3) Monopoly

Good, but missing three. Please see the model answers when ready. (Minus 2)

4. (1) Licensing of professionals

  (2) Control of valuable resources
  (3) Rewarding the biggest company with the lowest average cost
  (4) Government grants such as patents and copyrights

Good, but missing the first one from the lecture (in the text, before the list). (Minus 1)

5. The Law of Demand keeps a monopoly from increasing the prices without limitations. Consumers will not want to pay a higher price for the good or service. If the consumer can live without the good or service, then they will not pay for it. Therefore, there will be a lower quantity sold and a loss of revenue.

Terrific!

37/40. Good answers.--Andy Schlafly 23:14, 15 November 2009 (EST)