ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
All of the following are ways by which existing firms can deter the entry of new firms into an industry except
A.
threatening to raise prices.
B.
advertising products aggressively.
C.
continuously producing new and improved products.
D.
earning less than maximum profit.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution
Trending nowThis is a popular solution!
Step by stepSolved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- 5.arrow_forwardThe size of a firm is more important than market share in determining market power for an industry or product. A. True B. Falsearrow_forwardLocal gas stations in cities are an example of: A. monopoly firms B. monopolistic components C. oligopoly firms D. perfectly competitive E. monopolistic competitionarrow_forward
- Question 4 Many companies reward their managers based on profits so that the managers will make decisions to maximize profits. However, some companies are paying their managers based on sales or revenue, instead of profits, so their managers will make decisions to maximize revenue. For example, at Reebok, the former CEO Paul Fireman received a nickel for every pair of shoes sold. a. Suppose that there are two existing firms in the market competing in quantity. Ignore market uncertainty and long-run competition. Firm B's manager is always paid based on firm B's profits. Firm A has been paying its manager based on profits but now changes to pay the manager solely based on revenue. Each manager chooses the production level (quantity) for his firm simultaneously. Is it possible for the above change in firm A's compensation system to increase firm A's profits? What are the direct effects and strategic effects on firm A's profit? Explain. Direct Effect (Circle one): Positive Negative…arrow_forwardThe situation of monopolistic competition is created by A. Small number of producers of a commodity B. Lack of homogeneity of the product produced by different firms C. Imperfection of the market for that product D. All of the abovearrow_forwardIf short-run economic profits are greater than zero for firms in a monopolistically competitive market, in the long run we expect: A. competing firms to enter the market and sell similar products. B. profits to increase. C. the demand curve for firms in the market to shift to the right. D. entry barriers to prevent competing firms from entering this market.arrow_forward
- x Question Completion Status The following graph shows the costs and revenues of a typical firm operating in a certain market condition. What type of market this firm is operating under? Is it a perfect competition, or monopoly, or monopolistic competition market? How can you tell? Explain. MC ATC D AVC Save Aarrow_forwardCar brands are a part of ___________ type of market structurearrow_forwardKroger, the country's leading grocery-only chain, added a line of private label organic and natural foods call Simple Truth to its stores. If you've priced organic foods, you know they are more expensive. For example, a dozen conventionally farmed Grade-A eggs at Kroger costs consumers $2.3, whereas Simple Truth eggs are priced at $4.8 per dozen. One study found that, overall, the average price of organic foods is 85 percent more than that of conventional foods. However, if prices get too high, consumers will not purchase the organic options. One element of sustainability is organic farming, which costs much more than conventional farming, and those higher costs are passed on to consumers. Suppose that a conventional egg farmer's average fixed costs per year for conventionally-farmed eggs are $1 million per year, but an organic egg farmer's fixed costs are three times that amount. Further assume that the organic farmer's variable costs of $2.6 per dozen are twice as…arrow_forward
- Match each concept with its corresponding definition:- Pure and perfect competition. Imperfect competition. The monopoly. The oligopoly. Monopolistic competition. Barriers to entry into an industry. A. All restrictions that do not allow the company to produce a certain type of production. B. A type of market where several companies sell a standardized or differentiated product with limited ability to control prices, having high barriers to enter the market and considerable restrictions on access to the economic information. C. A type of market where many companies produce and sell standardized products, there are no barriers to entry into the industry, one has free access to economic information and none of these companies is powerful to influence (increase or decrease) the market price. D. A type of market in which there are one, several or a considerable number of companies in the industry that control the price level in a certain way; on the other hand, there are barriers to entry…arrow_forwardWhich of the following is TRUE about the pharmaceutical industry? a. In the United States drug companies can receive a patent of 100 years for each drug they develop b. Lowering the length of patents could induce greater innovation and new drug development. c. Raising the length of patents would lower profits of pharmaceutical companies d. Price controls in other countries make existing drugs more affordable overseas but they decrease the overall rate of innovation for new drugs.arrow_forwardSince products are differentiated in_____ each firm faces a downward sloping demand curve, and firms have limited market power. a. Monopoly b. Perfect Competion c. Oligopoly d. Monopolistic Competetion e. All of the Abovearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSONEngineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
- Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage LearningManagerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education