Which of these contributes to the existence of monopoly power?
A)A continuously decreasing long-run average cost curve
B)Possession of a patent
C)Control over essential output
D)All of these responses are correct.

Question

Quizplus · Accepted Answer

All three options contribute to the existence of monopoly power. A continuously decreasing long-run average cost curve allows the firm to produce at a lower cost than any potential competitors, giving them an advantage. Possessing a patent gives the firm the exclusive right to produce and sell a particular product or service, preventing any potential competition. Control over essential output means that the firm has a significant market share and can potentially dictate prices or limit supply, giving them a monopoly power.

Which of These Contributes to the Existence of Monopoly Power