week6ecodis

300 words / 2 sources

After watching the video clip from Forrest Gump, consider that Forrest’s good luck of “being in the right place at the right time” allowed him to operate as a monopoly. Typically, the fishing industry is a highly competitive industry where economic profits are rarely made in the long run. However, in a twist of fate, Forrest’s boat is the lone survivor after a hurricane washes ashore and destroys all the other shrimp boats.

Consider the barriers to entry facing potential competitors in Forrest’s monopoly market. The more contestable a market, the closer it will be to a perfectly competitive market, whereas the less contestable a market, the closer it will be to a monopoly.

What barriers to entry exist in other industries that allow certain firms to operate as a monopoly?  Are these barriers contestable?