Explain the source of monopoly power for DeBeers' Diamond Mine in South Africa, Microsoft (owned by Bill Gates), the American Medical Association (which licenses doctors), Polaroid's Instant Picture Cameras, USAir (which owns virtually all the gates at the airport in Charlotte, North Carolina), and electric utilities
DeBeers' controls the scarce resource by controlling the distribution of the vast majority of the world's diamonds. Microsoft has marketing superiority and perhaps a unique resource in Bill Gates, now a multibillionaire. The AMA restricts the supply of doctors through licensing (a legal restriction). Polaroid had an (expired) patent that allowed it to monopolize instant pictures. It successfully challenged Kodak's attempt to enter the instant photography market. USAir is using a deliberately erected entry barrier; planes cannot fly into or out of an airport without a gate. Electric companies have economies of scale (as well as large sunk costs).
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When the unemployment rate rises, college enrollment increases because workers seek to expand training. This is an example of:
A. correlation and causation. B. a negative correlation. C. normative economics. D. macroeconomics.
Using the above figure, at which price is there neither excess quantity demanded nor excess quantity supplied?
A. P1 B. P2 C. P3 D. none of these
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,
A. increases B. remains constant. C. initially increases, then decreases. D. decreases.
Suppose that for each firm in the competitive market for potatoes, long-run average cost is minimized at $0.20 per pound when 500 pounds are grown. The demand for potatoes is Q = 10,000/p. If the long-run supply curve is horizontal, then how many firms will this industry sustain in the long run?
A) 0 B) 100 C) 50,000 D) There is not enough information to answer.