question archive 1)Large barriers to entry exist in which of the following market structures? A
1)Large barriers to entry exist in which of the following market structures? A
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1)Large barriers to entry exist in which of the following market structures?
A. Perfect competition only
B. Perfect competition and monopolistic competition
C. Oligopoly and monopoly
D. Monopoly only
2)A uniform price monopolist's marginal revenue will always be less than market price except for the first unit sold. This is because:
a. there are substantial startup costs and other barriers to entry.
b. demand and marginal revenue have an inverse relationship.
c. monopolists always have higher production costs than other types of firms or industries.
d. the monopolist must reduce the price of all units of output, not just an additional unit, in order to increase sales.
3)The provision of an education in public school is:
A. nonexclusive and rival.
B. exclusive and rival.
C. exclusive and non-rival.
D. Nonexclusive and non-rival.
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1)(C) Oligopoly and monopoly
There are barriers that prevent new firms from entering oligopolies and monopolies, resulting in few (oligopoly) or one (monopoly) firms. In monopolistic competition and perfect competition, on the other hand, there are limited barriers to entry, resulting in many firms in both market types.
2)The correct answer is a. there are substantial startup costs and other barriers to entry.
This is the correct answer because of the presence of certain production cost. The monopolist has to keep the price of the initial unit at a low level to gain the market share. This strategy would lead to attracting consumers in the market. For the further units to be sold, the monopolist would improve the price level, where the marginal revenue would be equal to the marginal cost.
3)The provision of an education in public school is (D) Nonexclusive and non-rival. Public school is nonexclusive (also know as non-excludable) because any student can attend without needing to pay for it. Additionally, it is non-rival because one student attending does not prevent another student from attending since public schools must accept all students. Therefore, public schools are a public good.
