Economics
Question
Register Now
Welcome to the ever growing Protoedu family of knowledge seekers and torch bearers. The Protoedu family surpasses the mundane boundaries set by political interests because the Protoeduers (Protoedu family members are fondly known as ) only believe in one concept - Sharing is Growing Asking is Glowing Hearty Welcome once again !!
Answer ( 1 )
a) In an oligopoly market, there are barriers to the entry of new firm. The patents right are largely created for these firms and hence entry is restricted to new firms. The existing firms need not face any problem of new firm and they are able to earn extra normal profit.
b) Only few numbers of firm in the industry but they are big firm dominate the market for product. They establish brand loyalty through intense advertising. Hence they are able to earn extra normal profit.