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Monopoly
Monopoly
Barrier to entry:
Any impediment that prevents new firms. From entering an industry And competing on an equal basis with existing firms. Legal restrictions Economies of scale Control of essential resources
Legal restrictions
Patents and invention incentives Exclusive right to sell a product for 20 years from the date the patent application is filed. Incentive for innovation. Licenses and other entry restrictions. Government awarding an individual firm the exclusive right to supply a particular good or service. Federal and state license
Economies of scale
Natural monopoly Downward-sloping long-run average cost curve One firm can supply market demand at a lower average cost per unit than could two Firms.
Barriers to Entry:
Supplying something that other producers cant match Unique experience Monopolies Local, national, international Long-lasting monopolies Rare - economic profit attracts competitors Technological change. 7