ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Monopolies tend to generate high profits, have high barriers of entry, and not have significant competition.
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Monopolies tend to generate high profits, have high barriers of entry, and have significant competition.
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Monopolies tend to generate high profits, have low barriers of entry, and not have significant competition.
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None of the above
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Detailed explanation-1: -Which of the following is true of the monopoly structure? Monopolies tend to generate high profits, have high barriers to entry, and not have significant compittion.
Detailed explanation-2: -Once a natural monopoly has been established, there will be high barriers to entry for other firms because of the large initial cost and because it would be difficult for the entrant to capture a large enough part of the market to achieve the same low costs as the monopolist.
Detailed explanation-3: -In a monopoly market, the seller faces no competition, as he is the sole seller of goods with no close substitute. Description: In a monopoly market, factors like government license, ownership of resources, copyright and patent and high starting cost make an entity a single seller of goods.
Detailed explanation-4: -There are two types of monopoly, based on the types of barriers to entry they exploit. One is a natural monopoly, where the barriers to entry are something other than legal prohibition. The other is a legal monopoly, where laws prohibit (or severely limit) competition.