The fundamental source of monopoly power is
A)barriers to entry.
B)profit.
C)decreasing average total cost.
D)a product without close substitutes.

Question

Quizplus · Accepted Answer

Barriers to entry prevent new firms from entering the market and competing with established firms. This lack of competition allows the established firm to maintain a monopoly and charge higher prices. This is the fundamental source of monopoly power. The other options may contribute to a firm's ability to maintain a monopoly, but they are not the root cause.

The Fundamental Source of Monopoly Power Is