A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for taxi services. In order to own and operate a taxi, drivers are required to obtain a taxi medallion. Which of the following best explains the barriers to entry that exist in this scenario? O Increasing returns to scale O Control over an important input O Legal barriers
A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for taxi services. In order to own and operate a taxi, drivers are required to obtain a taxi medallion. Which of the following best explains the barriers to entry that exist in this scenario? O Increasing returns to scale O Control over an important input O Legal barriers
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter9: Monopoly
Section: Chapter Questions
Problem 19SQ
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![A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling
to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized
markets and competing for customers.
Consider the market for taxi services. In order to own and operate a taxi, drivers are required to obtain a taxi medallion.
Which of the following best explains the barriers to entry that exist in this scenario?
Increasing returns to scale
Control over an important input
O Legal barriers](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F432af433-cc0d-4bd1-964c-9d071ee85279%2Fbde42003-b9af-47e3-b9f8-eefe577dac64%2F8j2h1xj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling
to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized
markets and competing for customers.
Consider the market for taxi services. In order to own and operate a taxi, drivers are required to obtain a taxi medallion.
Which of the following best explains the barriers to entry that exist in this scenario?
Increasing returns to scale
Control over an important input
O Legal barriers
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