Microeconomics Essay Example | Topics and Well Written Essays - 1500 words - 4

Microeconomics - Essay Example This is illustrated by the diagram below. c) In order to achieve a socially efficient level of coal gas mining, policies that promote the underground water system understanding, interconnectivity and the gas extraction and processing life cycle should be adopted. Secondly, policies that demand absolute scientific knowledge of the industry and its potential impacts on the society matter. These to enable a comparison of efficient coal power generation and the societal efficient production requirements to minimize the adverse effects on the society. a). The key most barrier to entry that would help to establish and keep Monsanto’s market power in the United States seed market is the patenting of the Monsanto seeds that prevents farmers from stocking other seed companies. The high cost of entry into the seed industry as a result of the high prices charged by Monsanto is another significant barrier to entry. New companies would find it very expensive to incur high entry costs that may be risky given the established Monsanto Company. The policies and the high prices are the significant barriers to the entry of other companies into the industry. b). If the United States Department of Justice investigations resulted in the cancellation of the Monsanto patents as an anticompetitive practice in the seed industry, a number of resultant effects would be experienced. Firstly, the level of competition in the US seed industry will most likely increase as more seed companies will be able to venture into the industry with reduced barriers to entry. The farmers will have a choice between varieties of the seed companies for their seed markets. Secondly, the supply of seeds is likely to increase with increased number of seed companies into the industry. As a result, the prices of seeds in the market will be driven down by the increased supply, and this would reduce the