The following statements give some information about seven markets. 1. Coca-Cola cuts its price below that...

 

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The following statements give some information about seven markets. 1. Coca-Cola cuts its price below that of Pepsi-Cola in an attempt to increase its market share. 2. A single firm, protected by a barrier to entry, produces a personal service that has no close substitutes. 3. A barrier to entry exists, but the good has some close substitutes. 4. A firm offers discounts to students and seniors. 5. A firm can sell any quantity it chooses at the going price. 6. The government issues Nike an exclusive licence to produce golf balls. 7. A firm experiences economies of scale even when it produces the quantity that meets the entire market demand. Which of the seven cases are natural monopolies and which are legal monopolies? Which can price discriminate, which cannot, and why? The firm described in The firm described in is a natural monopoly. is a legal monopoly. O A. statement 2; statement 6 OB. statement 7; statement 6 O C. statement 6; statement 7 O D. statement 2; statement 7 The firm described in statement discriminating. The firm described in A. statements 2 and 3; can price discriminate if it can is currently price eliminate the current barriers to entry B. statement 1; increase advertising C. statements 2, 3, 6, and 7; eliminate the barriers to entry D. statements 2, 3, 6, and 7; distinguish between different classes of consumers The following statements give some information about seven markets. 1. Coca-Cola cuts its price below that of Pepsi-Cola in an attempt to increase its market share. 2. A single firm, protected by a barrier to entry, produces a personal service that has no close substitutes. 3. A barrier to entry exists, but the good has some close substitutes. 4. A firm offers discounts to students and seniors. 5. A firm can sell any quantity it chooses at the going price. 6. The government issues Nike an exclusive licence to produce golf balls. 7. A firm experiences economies of scale even when it produces the quantity that meets the entire market demand. Which of the seven cases are natural monopolies and which are legal monopolies? Which can price discriminate, which cannot, and why? The firm described in The firm described in is a natural monopoly. is a legal monopoly. O A. statement 2; statement 6 OB. statement 7; statement 6 O C. statement 6; statement 7 O D. statement 2; statement 7 The firm described in statement discriminating. The firm described in A. statements 2 and 3; can price discriminate if it can is currently price eliminate the current barriers to entry B. statement 1; increase advertising C. statements 2, 3, 6, and 7; eliminate the barriers to entry D. statements 2, 3, 6, and 7; distinguish between different classes of consumers

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Answer 1 Natural monopolies are those which are producing at min of AVC and as p... View the full answer