Instructions
BeverageAndAlcoholCase Study_2_SandBarAndHighBar (Protected View) – Word Tell me what you want to do Review View Help ess you need to edit, it’s safer to stay in Protected View. Enable Editing Beverage & Alcohol Case Study: Sand Bar and High Bar While out on bail pending her trial for drunk driving, Glenda drove to the other end of town. She drank four beers at the Sand Bar and two at the High Bar, establishments that are a kilometre apart. Her erratic driving caused another driver to leave the road and hit a telephone pole. The driver, who sustained a broken leg and multiple fractures in the accident, is suing both bars. Questions to complete: 1. Explain how each bar can defend itself against the lawsuit? 2. Could the plaintiff also sue Glenda? Why or Why not? 3. Discuss the likely outcome of this case? 1. Sources of nopoly power A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for diamonds. Throughout much of the twentieth century, South Africa’s De Beers group was viewed as a monopoly, because it controlled a large percentage of diamond production and sales. Which of the following best explains the barriers to entry that exist in this scenario? Control over an important input Legal barriers Increasing returns to scale
