Explain The Sources Of Monopoly Power

Sources of Monopoly Power:

Monopolies derive its market power from obstacles to entry; circumstances that prevent or greatly prevent a potential competitor's ability to compete in a market. There are three major types of barriers to entries: economic, legal and deliberate.

 Economic barriers: Economic barriers includes economies of scale, capital requirements, cost advantages and technological superiorities.

 Economies of scale: Monopolies are characterized by decreasing costs for a particularly large range of productions. Decreasing costs coupled with large initial costs give monopolies an advantage over their competitors. Monopolies are