Krugman's Economics For The Ap® Course
3rd Edition
ISBN: 9781319113278
Author: David Anderson, Margaret Ray
Publisher: Worth Publishers
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Question
Chapter 12R, Problem 2CTQ
To determine
The barriers for following industries:
- Electric power utilities industry.
- Word-processing software
- Cold remedies
- Textbooks
- Family medicines
Expert Solution & Answer
Explanation of Solution
- Following are the barriers for electric power utilities:
- It is generally owned by public sector which is responsible for distribution of electricity and it does this under
monopoly . Therefore, there are high barriers to entry or exit. - Legal barriers as electricity distribution should be fair for every customers.
- Barriers due to high competition.
- Following are the barriers for word processing software:
- Technical barriers where people selling word processors must possess good technical knowledge.
- High competition where price needs to be kept lower to compete in the market for this costly product.
- Following are the barriers for cold remedies providing firms:
- Due to massive competition, firms have to keep their prices very low.
- The profit earned can be normal, this reduces the barriers to entry or exit for other firms.
- Following are the barriers for textbooks:
- Publishing textbook is a costly affair that every writer does not afford.
- Another barrier is to find a good publisher who can publish the textbooks.
- Marketing and advertising such books is also involves cost. Thus it hinders the firm to enter such industry.
- Following barriers to family medicines:
- Family medicines are not approved medically which can be sold or bought in the market.
- In medical sector, legal compliances are very high.
- Also, firm needs to be very cautious in selling medicines as it may have side effect.
Economics Concept Introduction
Barriers to industry: Barriers to an industry refers to the hindrances that are imposed by various means preventing a firm to enter or exit such industry. For instance, if a company wants to enter a music industry then it has to follow various legal compliances which can act as barrier for small companies.
Chapter 12R Solutions
Krugman's Economics For The Ap® Course
Ch. 12R - Prob. 1MCQCh. 12R - Prob. 2MCQCh. 12R - Prob. 3MCQCh. 12R - Prob. 4MCQCh. 12R - Prob. 5MCQCh. 12R - Prob. 6MCQCh. 12R - Prob. 7MCQCh. 12R - Prob. 8MCQCh. 12R - Prob. 9MCQCh. 12R - Prob. 10MCQ
Ch. 12R - Prob. 11MCQCh. 12R - Prob. 12MCQCh. 12R - Prob. 13MCQCh. 12R - Prob. 14MCQCh. 12R - Prob. 15MCQCh. 12R - Prob. 16MCQCh. 12R - Prob. 17MCQCh. 12R - Prob. 18MCQCh. 12R - Prob. 19MCQCh. 12R - Prob. 20MCQCh. 12R - Prob. 21MCQCh. 12R - Prob. 22MCQCh. 12R - Prob. 23MCQCh. 12R - Prob. 24MCQCh. 12R - Prob. 25MCQCh. 12R - Prob. 1FRQCh. 12R - Prob. 2FRQCh. 12R - Prob. 3FRQCh. 12R - Prob. 2CTQCh. 12R - Prob. 4CTQCh. 12R - Prob. 5CTQ
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