Economies of scale, location, and ownership of a raw material are all barriers to entry that can contribute to the emergence of a monopoly.

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Economies of scale refer to the advantages a firm has due to its size, which enables it to produce goods at a lower cost per unit than smaller competitors. Location can be a barrier if the cost of transporting goods to a particular market is prohibitively high. Ownership of a raw material is also a barrier if it is necessary for production and is controlled by only one or a few firms. These factors can make it difficult for new firms to enter the market, increasing the likelihood that a monopoly will emerge.

Economies of Scale, Location, and Ownership of a Raw Material