One barrier to entry into a monopoly market is:
A. the existence of large economies of scale.
B. very large fixed costs relative to variable costs.
C. the high cost of required infrastructure for an industry.
D. All of these statements are true.
Answer: D
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Suppose that a worker in Cornland can grow either 40 bushels of corn or 10 bushels of oats per year, and a worker in Oatland can grow either 5 bushels of corn or 50 bushels of oats per year. There are 20 workers in Cornland and 20 workers in Oatland. If the two countries do not trade, Cornland will produce and consume 400 bushels of corn and 100 bushels of oats, while Oatland will produce and
consume 60 bushels of corn and 400 bushels of oats. If each country made the decision to specialize in producing the good in which it has a comparative advantage, then the combined yearly output of the two countries would increase by a. 280 bushels of corn and 450 bushels of oats. b. 340 bushels of corn and 500 bushels of oats. c. 360 bushels of corn and 520 bushels of oats. d. 360 bushels of corn and 640 bushels of oats.
A tariff is a tax on imports imposed by the country that is importing the goods.
Answer the following statement true (T) or false (F)
Under the ________, the federal deficit was to be eliminated by 1991.
A. Clinton Deficit Eradication bill B. Clayton Act C. McCain-Feingold bill D. Gramm-Rudman-Hollings Act
A monopolistically competitive firm in the long run ________
A) is inefficient because it makes zero economic profit B) produces a profit-maximizing amount of output that is less than capacity output C) is efficient because it makes zero economic profit D) sets its price equal to its marginal cost