Which of the following may be possible explanations for a government to grant franchises and create a potential barrier to entry? I. The government may grant exclusive production rights to a firm so that it can share the monopoly profits with the firm. II. The government may use legal restrictions on entry so as to create and redistribute monopoly profits. III. Governments grant patents and copyrights, thereby creating barriers to entry in order to encourage creation of new ideas and promote innovation.

MCQs on major topics and theories in the field of Industrial Organization. Topics include: Market structure analysis and the strategic behaviors of competing firms, including (but not limited to) product differentiation, collusion, price discrimination, pricing strategy, non-price discrimination (i.e. advertising), horizontal mergers, vertical integration, and vertical restraints.