Question

To maintain a monopoly, a firm must have?

1) a perfectly inelastic demand
2) an insurmountable barrier to entry
3) marginal revenue equal to demand
4) few competitors

Answer 1

To maintain a monopoly, a firm must have an insurmountable barrier to entry.

Step-by-step explanation:

A firm must have an insurmountable barrier to entry in order to maintain a monopoly. Barriers to entry prevent or discourage competitors from entering the market, giving the monopolist control over the industry. These barriers can include legal restrictions, patents, trademarks, and control of a physical resource. For example, a company that owns the patent for a certain drug can have a monopoly in the market for that drug.