Which of the following situations is least likely to lead to high barriers to entry and monopoly supply? A) Governmental licensing and regulations are present. B) Natural resources are spread among many firms. C) Economies of scale are present. D) Patents or exclusive production rights are granted. Answer: B Why is the answer B, even though natural resources are spread among many firms, there is still a limited amount of natural resources, which makes barriers of entry high!!! I thought the answer is A, despite government regulation and licensing, just about all industries are gov’t regulated and licensed… Thoughts?
Nevermind, the question says high barriers to entry AND monopoly supply.
“many firms” contradicts “monopoly”
a monopoly / barrier to entry can result if one firm has exclusive access to a resource