Attempts: 0 Average: 0/1 4. Sources of market power Aa Aa Consider the market fo

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Attempts: 0 Average: 0/1 4. Sources of market power Aa Aa Consider the market for public water. In this industry, low average costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes makes it risky and most likely unprofitable for a competitor to enter the market. A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main source of a monopolist's market power is barriers to entry-that is, obstacles that make it difficult for competitors to enter the market. Which of the following best describes the source of the monopolist's market power in the preceding scenario? O Hard to duplicate resources O Economies of scale O Innovation QMA 3.16 © 2004-2016 Aplia. All rights reserved 0 2013 Cengage Learning except as noted. All rights reserved Grade It Now Save & Continue Continue without saving

Explanation / Answer

Question 1). Answer :- Option B). Economies of scale.

Explanation :- "Economies of scale" explains the source of market power of monopolist in the public water industry in the above given question.

Question 2). Answer :- Option C). Hard to duplicate resources.

Explanation :- "Hard to duplicate resources" explains the source of market power of monopolist in the diamond market industry in the above given question.

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