Question

1. Which of the following have studies shown about the effects of barriers to market entry?

a.	Barriers have not affected markets.	b.	Barriers greatly impacted market structure.
c.	It has indicated a lack of good data.	d.	Data has indicated that barriers impact very little change over time.

2. Which of the following best describes contestable markets?

a.	Markets with only one firm	b.	The dominance of a market by the government
c.	Markets with low barriers to entry	d.	Markets with high barriers to entry

3.All of the following are determinants of market structure except ________.

a.	Economies of scale	b.	Barriers to entry
c.	Profit maximization	d.	Sunk costs

4. Barriers to market entry do not include which of the following?

a.	Patents	b.	Copyrights
c.	Sunk costs	d.	Similarity is cost structure across firms

Answer 1

1. The correct answer is b. Barrier greatly impacted market structure.

Because barrier to entry are market, technological and legal forces that discourage competitor to enter into the market. So barrier to entry impact the market structure greatly.

2. The correct answer is C. Market with low barrier to entry.

Because contestable market is a form of Market where firm can enter and leave freely with low sunk cost.

3. The correct answer is d) sunk cost.

Because sunk cost is the cost that has already incurred and can not be recovered, so sunk cost is not the determinant of market structure.

4. The correct answer is d. The similar cost structure across the firm