One major barrier to entry under pure monopoly arises fromMultiple Choicethe availability of close substitutes for a product.the cost of the infrastructure needed to produce.the price taking ability of the monopoly.diseconomies of scale.
Question
One major barrier to entry under pure monopoly arises fromMultiple Choicethe availability of close substitutes for a product.the cost of the infrastructure needed to produce.the price taking ability of the monopoly.diseconomies of scale.
Solution
The major barrier to entry under pure monopoly arises from the cost of the infrastructure needed to produce. This is because in a monopoly, the single firm controls the entire market. It has the ability to set the price and quantity of the product. To enter such a market, a new firm would need to invest heavily in infrastructure to produce the product, which can be prohibitively expensive. This high cost of entry prevents other firms from entering the market and competing with the monopoly.
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