Graded Assignment | Back to Assignment Due Sunday 11.26.17 at 11:00 PM Attempts:

Question

Graded Assignment | Back to Assignment Due Sunday 11.26.17 at 11:00 PM Attempts: 00 Keep the Highest: 0/1 1. Sources of monopoly power Aa Aa A monopoly, unlike a perfectly competitive firm, assumes some market power. It can raise its price, within limits without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entry-that is, other companies cannot enter the market to create competition in that particular industry. Consider the market for a lottery. The provincial government has licensed itself as the only entity entitled to distribute tickets for the lottery. It is impossible for any private firm to start up a competitive lottery without a government licence to do so. Which of the following best explains the barriers to entry that exist in this scenario? O O O Legal restrictions Economies of scale Exclusive ownership of a scarce resource

Explanation / Answer

Legal restriction.

As government has licensed itself to distribute tickets for the lottery.

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