The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-In which of the following situations, is a barrier to entry into a monopoly least likely to exist?
A)A large firm enjoys economies of scale.
B)The tariffs on foreign goods are eliminated by the government.
C)A company is the sole inventor of what it produces and no one else can make a good substitute.
D)Government restrictions such as license requirements are enacted.
E)A company is the only owner of an essential resource needed to produce its product.

Question

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7
 
-In which of the following situations, is a barrier to entry into a monopoly least likely to exist?
A)A large firm enjoys economies of scale. 
B)The tariffs on foreign goods are eliminated by the government. 
C)A company is the sole inventor of what it produces and no one else can make a good substitute. 
D)Government restrictions such as license requirements are enacted. 
E)A company is the only owner of an essential resource needed to produce its product.

Quizplus · Accepted Answer

When tariffs on foreign goods are eliminated by the government, foreign competitors can enter the market more easily, reducing the monopolist's market power and making it more difficult for them to maintain a monopoly.

The Figure Given Below Shows the Aggregate Demand and Supply