Question

Middletown, U.S.A., has been dealing with several monopoly firms, making it difficult for new firms to enter. Match each company to the best description of the particular "barrier to entry" it is benefitting from Drag each item on the left to its matching item on the right. Larry's Lawn Care has exclusive rights to mow the grass for all city government property in town for the next 5 years. Marvin's Mining Company runs 100 different pieces of large equipment and trucks in daily operations. control of resources problems raising capital Burt's Brass Band gets a royalty from every download of a song. economies of scale patents and copyright law Wanda's Water Park adds a new water slide or ride each year to the already large park, and can do it fairly cheaply due to volume discounts from the firm that produces the slides. licensing Lucinda's Lake Condos owns all the property around Middletown Lake, the only lake for 200 miles.

Answer 1

In Middletown, several firms maintain their monopoly status through different barriers to entry: Larry's Lawn Care has a licensing agreement, Marvin's Mining Company benefits from economies of scale, Burt's Brass Band is protected by intellectual property laws, Wanda's Water Park leverages economies of scale through volume discounts, and Lucinda's Lake Condos controls essential resources.

Step-by-step explanation:

Barriers to entry are critical in determining the level of competition within a market. In Middletown, U.S.A., these barriers play a pivotal role in maintaining monopoly firms' dominant positions. For Larry's Lawn Care, the main barrier is licensing, as they have an exclusive agreement to mow city government property. Marvin’s Mining Company benefits from economies of scale due to the large scale of its operations, which deters new entrants who cannot match this efficiency. Burt's Brass Band, on the other hand, is protected by patents and copyright law due to royalties earned from every song download, indicating control of intellectual property. Wanda's Water Park experiences economies of scale as well, obtaining discounts from suppliers for bulk purchases which provides a cost advantage over potential competitors. Lastly, Lucinda's Lake Condos has a control of resources, owning all the property around the only nearby lake, and thus no competing firm can offer the same value without access to similar resources.