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1: Barriers to entry help maintain market power and earn positive economic profits. These factors apply to all imperfectly competitive firms. Discuss these barriers are and provide a real-world application of it.
2: Pharmaceutical companies can expect to earn large profits from blockbuster drugs (for high blood pressure, depression, ulcers, allergies, sexual dysfunction) while under patent protection. What is the source of these profits? Upon patent expiration, numerous rival drug companies offer generic versions of the drug to consumers. (The original developer continues to market the drug under its trade name and usually offer a second generic version as well.) Discuss the effect of patent expiration on market structure, pricing, and profitability for the drug.
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