Which of the following is a barrier to entry for a monopoly?
A) government licensing
B) patents
C) network externalities
D) all of the above

Question

Quizplus · Accepted Answer

All of the above are barriers to entry for a monopoly.

- Government licensing: The government can require businesses to obtain licenses in order to operate in certain industries or provide certain services. This creates a barrier to entry because new companies may not be able to obtain the necessary licenses, or may not have the resources to go through the process of obtaining them.
- Patents: A patent is a legal protection for an invention that gives the patent holder the exclusive right to use and sell the invention for a certain period of time. This creates a barrier to entry because competitors cannot legally produce or sell the same product during the patent's duration.
- Network externalities: Network externalities occur when the value of a product or service increases as more people use it. This creates a barrier to entry because a new company may not be able to attract enough customers to reach critical mass and compete with the established company.

Which of the Following Is a Barrier to Entry for a Monopoly