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.

3. (1) Monopolistic competition

   (2) Perfect competition
   (3) Monopoly

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

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 a lower quantity sold and a loss of profit.