Question

L. Sources of monopoly power tive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. ket power is through barriers to entry-that is, other companies cannot enter the market to create competition in that particular industry Complote the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario. Barriers to Entry Exclusive Ownership of a Key Resource Government Createcd Monopolies Scenario Economies of Scale In order to own and operate a taxd, drivers are required to obtain a taxi medallion. The Aluminum Company of America (Alcoa) formerly controlled all u.S. sources of bauxite, a key component in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late 19th century until the 1940s. In the natural gas industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes and hoses makes it risky and, most likely, unprofitable for competitors to enter the market Grade it Now Save & C Type here to search

Answer 1

Taxi: Government created monopoly, because to get a medallion the driver have to approach government only.

ALCOA: exclusive ownership of a key sources, because accompany is not a government company and it has the monopoly not to sell bauxite to others.

Natural gas industry: economics of scale, because it's not a government company and and it doesn't have the Monopoly of a a key resources but but it has the the monopolistic power of selling its product because the competitors are not able to invest to run the same business.