Question

The land you own has the only known source of aloe needed to make anti-itch lotion. In this case, your monopoly results from:

a. location.
b. ownership of scarce inputs.
c. sunk costs.
d. government restrictions.

Answer 1

The monopoly in this scenario results from the ownership of scarce inputs, specifically the control of a physical resource that is essential for producing a product.

Step-by-step explanation:

The monopoly on land that contains the only known source of aloe for making anti-itch lotion results from ownership of scarce inputs. This type of barrier to entry occurs when a company controls a scarce physical resource. Historical examples, like ALCOA's control over bauxite, illustrate how such control can prevent other firms from competing effectively and establish a natural monopoly.