Question

Each of the following firms benefits from barriers to entry in its industry. Indicate whether each of the barriers is natural or government created.

See Hint

Firms with Entry Barriers (5 items) (Drag and drop into the appropriate area below)

• a waste-treatment plant that cost a lot to build even though it costs only two cents to treat each gallon of waste

• a diamond company that owns nearly all of the world's diamond mines

• a small-town bar that is the only establishment in the county licensed to serve liquor

• a pharmaceutical company receives a patent for a new cancer-fighting drug

• a soda company that spends over $3 billion on advertising every year

Type of Barrier

• Natural

Drag and drop here

• Government created

Drag and drop here

Answer 1

Answer.)

Natural barriers to entry

1.) A waste-management plant that cost a lot to build even though it costs only two cents to treat each gallon of waste

2.) a diamond company that owns nearly of the world's diamond mines.

3.) A soda company that spends over $3 billion on advertising every year.

Government created barriers to entry

1.) A pharmaceutical company receives a patent for a new cancer-fighting drug.

2.) A small-town bar that is the only establishment in the country licensed to serve liquor.