A local or provincial electrical company has a monopoly that is protected by an entry barrier that takes the form of
A)control of a key raw material.
B)network externalities.
C)economies of scale.
D)perfectly inelastic demand curve.

Question

Quizplus · Accepted Answer

Economies of scale act as a barrier to entry because they allow the monopolistic company to produce at a lower average cost than any potential competitor, making it difficult for new entrants to compete.

A Local or Provincial Electrical Company Has a Monopoly That