Which statement is true?
A)One basis for monopoly is control over an essential resource.
B)All forms of a monopoly are illegal in the United States.
C)Economies of being established is the same as economies of scale.
D)General Motors is a monopoly.

Question

Quizplus · Accepted Answer

One basis for monopoly is control over an essential resource, such as a key input or a natural resource that cannot be easily duplicated. This gives the monopolist the power to restrict output and raise prices.

Answer: Neither B nor D are correct. 
 B is false because not all forms of monopoly are illegal in the United States. Monopolies that arise naturally from superior business practices or innovation are not illegal, but monopolies that result from anti-competitive behavior (such as predatory pricing or exclusive dealing) are illegal under antitrust laws. D is false because General Motors is not a monopoly. While it is a large and powerful corporation, it operates in a highly competitive market with numerous other firms producing cars and trucks.

Answer: C is false. 
 Economies of being established refers to the advantages that a long-standing company may have over new entrants because of its reputation, customer loyalty, and established relationships with suppliers and distributors. Economies of scale, on the other hand, refer to the cost savings that a firm can achieve by producing a large volume of output, typically because fixed costs can be spread over more units of production. These are two distinct concepts.

Which Statement Is True