A monopoly is MOST likely to be temporary if the monopoly power is derived from:

A) high barriers to entry.
B) a fundamental lack of substitutes for the monopolist's product.
C) economies of scale.
D) technological change.

Question

Keith Chapple · Accepted Answer

Final Answer : D, Explanation :  If a monopoly power is derived from technological change, it is more likely to be temporary as new technologies can emerge and disrupt the industry. This has been observed in industries such as telecommunications and software, where new products and services have entered the market and displaced established monopolies. In contrast, high barriers to entry and a fundamental lack of substitutes can make it difficult for competitors to enter the market, allowing the monopoly to continue for a longer period of time. Economies of scale can also give a monopoly power, but if new technologies emerge that allow competitors to achieve similar economies of scale, the monopoly may be disrupted.

A monopoly is MOST likely to be temporary if the monopoly power is derived from:

A) high barriers to entry.
B) a fundamental lack of substitutes for the monopolist's product.
C) economies of scale.
D) technological change.

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Learning Objectives

Related questions

A monopoly is MOST likely to be temporary if the monopoly power is derived from:A) high barriers to entry.B) a fundamental lack of substitutes for the monopolist's product.C) economies of scale.D) technological change.

Definitions

Learning Objectives

Learning Objectives

Related questions

A monopoly is MOST likely to be temporary if the monopoly power is derived from:

A) high barriers to entry.
B) a fundamental lack of substitutes for the monopolist's product.
C) economies of scale.
D) technological change.