Question : 41) Economies of scale will create a barrier to entry : 1387862

41) Economies of scale will create a barrier to entry in an oligopoly industry when

A) a firm’s minimum efficient scale occurs where long-run average total costs are constant.

B) the typical firm’s long-run average total cost curve reaches a minimum at a level of output that is a large fraction of total industry sales.

C) the typical firm’s long-run average total cost curve reaches a minimum at a level of output that is a small fraction of total industry sales.

D) the industry’s four-firm concentration ratio is less than 40 percent.

42) If economies of scale are relatively important in an industry, the typical firm’s

A) marginal cost curve will decline continuously until it reaches minimum efficient scale.

B) long-run average cost curve will begin rising before it reaches minimum efficient scale.

C) long-run average cost curve will reach a minimum at a level of output that leaves room for a large number of firms to enter the industry.

D) long-run average cost curve will reach a minimum at a level of output that is a relatively large fraction of total industry sales.

43) A patent is an example of

A) how ownership of a key input creates a barrier to entry.

B) a government-imposed barrier to entry.

C) occupational licensing.

D) how market failure can lead to oligopoly.

44) For many years the Aluminum Company of America (Alcoa) controlled most of the world’s supply of high quality bauxite, the ore needed to produce aluminum. What type of entry barrier was responsible for Alcoa’s position in the aluminum industry?

A) ownership of a key input

B) a government-imposed barrier

C) a patent on the manufacture of aluminum

D) economies of scale

45) Which of the following is not an example of a government-imposed entry barrier?

A) patents

B) occupational licensing

C) barriers to international trade

D) antitrust legislation

46) Consider a U-shaped long-run average cost curve that has a minimum efficient scale at 6,000 units of output. In this case, this industry would be

A) perfectly competitive if the market quantity demanded is 20,000 units.

B) monopolistically competitive if the market quantity demanded is 12,000 units.

C) an oligopoly if the market quantity demanded is 18,000 units.

D) an oligopoly if the four-firm concentration ratio is more than 10 percent.

47) Hewlett-Packard will not raise the prices of its personal computers without first considering how Dell might respond. This is evidence of

A) interdependence.

B) collusion.

C) cutthroat competition.

D) price fixing.

48) If economies of scale are relatively unimportant in an industry, the typical firm’s long-run average total cost curve will reach a minimum at a level of output that is a ________ fraction of total industry sales. The industry will be ________.

A) large; competitive

B) large; an oligopoly

C) small; competitive

D) small; an oligopoly

49) A patent is a government-imposed entry barrier because

A) it allows a firm to achieve economies of scale.

B) it is a key input owned by the firm that is granted the patent.

C) it limits the quantity of a good that can be imported into a country.

D) it gives a firm the exclusive right to a new product for a period of 20 years from the date the product is invented.

50) An example of a government-imposed barrier to entry gives a firm the exclusive right to a new product for a period of 20 years from the date the product is invented. This entry barrier is known as

A) a copyright.

B) a patent.

C) an exclusive marketing agreement.

D) a tariff.