Consider the following characteristics of a particular industry: - there are natural barriers to entry
- market price exceeds marginal cost of production
- there is no strategic behaviour in the industry
This industry is likely to be

Question

Quizplus · Accepted Answer

The natural barriers to entry and the fact that the market price exceeds the marginal cost of production suggest that there is a single dominant firm in the industry, which is likely a monopolist. The absence of strategic behavior further strengthens this conclusion, as it indicates that there are no other firms attempting to compete with the dominant firm or collude with it to increase their market power. The other options are less likely, as they require more competition and/or less market power than the characteristics suggest.

Consider the Following Characteristics of a Particular Industry: - There