Which of the following is a barrier to entry into a monopoly market?
A)Economic profits for the monopolist.
B)Economies of scale.
C)A large number of firms in the industry.
D)Production of a homogeneous product.

Question

Quizplus · Accepted Answer

Economies of scale create a high barrier to entry because new firms would have to enter the market and immediately compete against the existing monopolist's lower production costs. This makes it difficult for entrants to establish a profitable business in the market. Economic profits, production of homogeneous product, and a large number of firms in the industry do not necessarily create a barrier to entry in a monopoly market.

Which of the Following Is a Barrier to Entry into a Monopoly