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 the above are correct.

Question

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 the above are correct.

Quizplus · Accepted Answer

All of the choices contribute to the existence of monopoly power. A continuously decreasing long-run average cost curve means that the monopolist can produce at lower costs and charge higher prices, making it difficult for new competitors to enter the market. Possession of a patent gives the monopolist exclusive rights over the production and sale of a particular product, preventing competitors from entering the market. Control over essential output means that the monopolist has the power to influence prices and restrict the supply, making it difficult for new competitors to enter the market.

Which of These Contributes to the Existence of Monopoly Power