ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The sources of monopoly power include economies of scale, locational advantages, high sunk costs associated with entry, restricted ownership of key inputs, and government restrictions, such as exclusive franchises, licensing and certification requirements, and patents.

Detailed explanation-2: -These barriers include: economies of scale that lead to natural monopoly; control of a physical resource; legal restrictions on competition; patent, trademark and copyright protection; and practices to intimidate the competition like predatory pricing.

Detailed explanation-3: -Common barriers to entry include special tax benefits to existing firms, patent protections, strong brand identity, customer loyalty, and high customer switching costs. Other barriers include the need for new companies to obtain licenses or regulatory clearance before operation.

Detailed explanation-4: -The most common source of a barrier to entry into a monopolist’s market is that the monopolist owns a key resource necessary for production of that good. owning a key resource is the rarest source of barriers to entry. A monopoly is the sole seller of a product with no close substitutes.

Detailed explanation-5: -the price elasticity of demand (Ed), the number of firms in a market, and. interaction among firms. 04-Jan-2021