199
edits
Changes
Jump to navigation
Jump to search
Line 6:
Line 6: − <blockquote>+ + + + + + − </blockquote> + + + + + + + + + + + + + + +
Economics Homework Nine Answers - Student Three (view source)
Revision as of 16:03, November 12, 2009
, 16:03, November 12, 2009no edit summary
(listed from lowest prices to highest prices)
(listed from lowest prices to highest prices)
1. Perfect Competition
1. Perfect Competition
2. Perfectly Contestable Markets
2. Perfectly Contestable Markets
3. Monopolistic Competition
3. Monopolistic Competition
4. Oligopoly
4. Oligopoly
5. Cartel
5. Cartel
6. Monopoly
6. Monopoly
'''3. Explain which specific type of industry (e.g., oligopoly or something else) each of these quotes probably refers to: (1) "She's the finest hair stylist in town; no one has her special style!", (2) "Crazy Eddie ... his low prices are INSANE!", (3) "Don't like his prices? He's the only one in town selling what you need."'''
'''3. Explain which specific type of industry (e.g., oligopoly or something else) each of these quotes probably refers to: (1) "She's the finest hair stylist in town; no one has her special style!", (2) "Crazy Eddie ... his low prices are INSANE!", (3) "Don't like his prices? He's the only one in town selling what you need."'''
(1) Monopolistic Competition
(2) Perfectly Contestable Market
(3) Monopoly
'''4. List how monopolies can be established.'''
'''4. List how monopolies can be established.'''
1. Government creates monopolies by operation of law.
2. The licensing of professionals creates a barrier to entry.
3. Control of a valuable resource.
4. Economies of scale can create a monopoly by rewarding the biggest company with the lowest average cost.
5. Government grants of monopoly such as patents and copyrights.
'''5. What prevents a monopoly from increasing its prices without limitation?'''
'''5. What prevents a monopoly from increasing its prices without limitation?'''
People will not pay obscenely high prices, even if it's the only supplier. A monopoly must still sell when MR=MC.