Which of the following qualify as barriers to entering a monopoly market?
(i) a key resource's ownership is not defined
(ii) the government has given the existing monopoly the exclusive right to produce the good
(iii) the costs of production make a single producer more efficient than a large number of producers
A)(i) and (ii)
B)(ii) and (iii)
C)(i) only
D)(i), (ii) and (iii)

Question

Quizplus · Accepted Answer

Option (i) does not qualify as a barrier to entering a monopoly market, as it implies no one owns the resource and any firm can acquire it. Option (ii) and (iii) are both plausible barriers. The exclusive rights granted to the existing monopoly producer by the government in option (ii) hinder the entry of new firms. The costs of production, as described in option (iii), make it difficult for new firms to enter the market and be profitable, giving the current monopoly player an advantage. Option (B) correctly identifies both potential barriers to entry into a monopoly market.

Which of the Following Qualify as Barriers to Entering a Monopoly