1)Are canals and toll roads public goods? Explain.

2)What are barriers to entry that shield pure monopolies from competition?

1)Canals and toll roads are not pure public goods.

Even though in most of cases, canals and toll roads are available for most people to use, when many people use or commute at the same time or during rush hour, it limits the available usage of others since only a certain amount of space is provided. Therefore, roadway and waterway violate the condition of non-rivalry to be regarded as public goods.

Hence, they are not pure public goods, but quasi-public goods.

2)

1) Government licenses The government may choose or approve a firm and grant a license to a firm that allows them to produce a particular good without the other firms that may pose threats from other potential firms.

2) High start-up costs Since monopolies have the exclusive right to produce a particular good, the monopolist has to invest a high amount of capital and facilities in order to meet the consumers' demand. High capital costs may discourage potential entrants to enter the market.