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Licences and Patents Act as Barriers to Entry of New

question 82

True/False

Licences and patents act as barriers to entry of new firms, thus creating monopolies.


Definitions:

Average Fixed Cost

The fixed costs of production (e.g., rent, salaries) divided by the quantity of output produced; these costs decline as production increases.

Average Variable Cost

Total variable costs divided by the quantity of output, showing the variable cost per unit of output.

Marginal Cost

The price to produce an additional unit of a product or service.

Total Costs

The total expense of manufacturing that encompasses all constant and fluctuating costs.

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