A few questions in this problem set are based on the comments made by James Love to Congress regarding antitrust policy and the Petroleum industry. These are found at the end of the module on Antitrust Policy. Try to read the entire article carefully first... and then see if you can answer the questions (rather than fishing out the answer each time). Obviously you will go back and check to make sure you have it correct ... but to absorb the content it is best read it all first before going back.

What is it about the petroleum industry that simultaneously prevents entry and fosters joint ventures and other collaborations?

A. High fixed (and sunk) costs

B. All of these are mentioned and significant

C. The high dependence on patent holding by those already in the industry

D. The licensing requirements prior to entering