ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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E2
Conduct an analysis of market structures:
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- Which of the following can create monopolies? a. Economies of scale b. Scarce resources c. Agressive business tactics d. Government interventionarrow_forward20. How is a monopoly (or oligopoly for that matter) able to remain that way? Okay, let's say a company has no competitors today. But won't it start having some competitors tomorrow? Explain at least one reason why a monopoly or oligopoly could be long-lasting (e.g. why other firms may not wish to enter a monopolist's market and "start a fight" with a monopolist).arrow_forwardQuestion 4 of 20 Match each scenario with the source of monopoly market power. Mary McFly invents a time machine and gets legal protection from competition. Answer Bank control over resources Main Line Utilities can operate at a lower cost than multiple electric companies. patent The author of Economics for Dumbbells is given exclusive government licensing rights to produce this book. economies of scale Your city council gives All Talk Communication Services exclusive rights to build high speed internet infrastructure in сорyright your town. DeJeers Jewelers owns 80% of the world's diamond mines.arrow_forward
- Please solve questions 4 and 5!arrow_forwardQuestion 4: Monopolists, Competition & Externalities The production of electricity creates a lot of pollution. Whether coal or natural gas is being burned to create electric power, there are severe negative externalities from the production and consumption of energy. 1. Will the price of electricity be higher or lower if it is produced by a single monopolist rather than in a perfectly competitive industry? Why? 2. Will the quantity of electricity consumed be higher or lower if it is produced by a single monopolist rather than in a perfectly competitive industry? Why? 3. Will the total negative externality caused by pollution created in the production and provision of electricity be higher or lower if electricity is produced by a single monopolist rather than in a perfectly competitive industry? Why? 4. Is Total Surplus (that is, Consumer Surplus plus Producer Surplus) higher or lower if electricity is produced by a single monopolist rather than in a perfectly competitive industry? Why?…arrow_forwardQuestions: 1A) If MU Café, which is a monopolistically competitive firm, is making a positive profit in the short run, why might this profit become zero in the long run? 1B) If MU Café wants to keep the profit positive in the long run, what can it do? Provide ONE suggestion and briefly explain. 1C) What externality problem do you expect in the market for plastic bags? How does the government correct the inefficiency of the market? Explain in detail and diagram.arrow_forward
- 1. BC Hydro (electricity) and ICBC (auto insurance) are both examples of monopolies in British Columbia. Do these entities add value to society or create higher cost and more inefficiency? Why or why not? 2. Find an example of an Oligopoly and explain how the entity you chose either adds value to society or instills unnecessary costs to the public.arrow_forwardAnswer please questions!arrow_forwardQuestion 3: a. Explain the difference between and the economic relevance of fixed costs, sunk costs, variable costs, and marginal costs by using specific examples from everyday administrative activities. b. By using specific product markets briefly discuss the significant difference among the following market structures: (i) perfect competition, (ii) monopoly, (iii) monopolistic competition, and (iv) oligopoly. c. Why are externalities, public goods, and information asymmetry major problems in the market? Discuss.arrow_forward
- 22: What are some of the Factors Leading to Globalization? 23: What are the Characteristics of a Purely Competitive Market? 24: What are the Characteristics of a Monopolistic Competition Market?arrow_forwardIf Amazon sells dozens of similar types of pencils at slightly different prices, we might assume the pencil market is _________. Select one: a. an oligopoly. b. a monopolistically competitive market. c. a monopoly. d. a perfectly competitive market.arrow_forwardImagine a scenario in which the fashion industry is suffering from monopolistic price gouging and a dwindling demand (due to the existence of sweatshops and environmentally unfriendly business practices). A hypothetical situation such as this is likely to cause high unemployment in the fashion industry. Question: What could the government do to correct this market failure? Explain what they could do and include a diagram as well.arrow_forward
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