Fact 12.1.1 The following statements give some information about seven markets. Coca-Cola cuts its price below that of Pepsi-Cola in an attempt to increase its market share. A single firm, protected by a barrier to entry, produces a personal service that has no close substitutes. A barrier to entry exists, but the good has some close substitutes. A firm offers discounts to students and seniors. A firm can sell any quantity it chooses at the going price. The government issues Nike an exclusive licence to produce golf balls. A firm experiences economies of scale even when it produces the quantity that meets the entire market demand. Refer to Fact 12.1.1. Which of the statements describes a market which is a natural or legal monopoly? Statement ________ describes a natural monopoly and statement ________ describes a legal monopoly.

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Fact 12.1.1

The following statements give some information about seven markets.

Coca-Cola cuts its price below that of Pepsi-Cola in an attempt to increase its market share.
A single firm, protected by a barrier to entry, produces a personal service that has no close substitutes.
A barrier to entry exists, but the good has some close substitutes.
A firm offers discounts to students and seniors.
A firm can sell any quantity it chooses at the going price.
The government issues Nike an exclusive licence to produce golf balls.
A firm experiences economies of scale even when it produces the quantity that meets the entire market demand.

Refer to Fact 12.1.1. Which of the statements describes a market which is a natural or legal monopoly?

Statement ________ describes a natural monopoly and statement ________ describes a legal monopoly.

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