Theory of Monopoly
- Created by: sammilaw
- Created on: 16-11-15 09:38
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- Theory of Monopoly
- Chapter 4
- Barriers to entry (The 3 **)
- Structural - difference in production costs
- Ownership or control of a scarce resource
- Economies of scale
- Network effects i.e. popularity of social media
- High set up costs i.e. sunk costs
- High R&D costs
- Strategic
- Hostile takeovers or integration
- Limit or predatory pricing
- Product differentiation i.e. branding
- Advertising costs - sunk costs
- Statutory - entry barriers given force of Law
- CopyRight or patents
- Structural - difference in production costs
- Barriers to exit
- Capital inputs that are specific to an industry so would have little or no resale value
- Money spent on advertising, marketing and R&D which cannot be carried forward to another industry
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