Monopoly Characteristics

Steps:

• Recall monopoly definition: single seller with market power due to barriers preventing entry.
• Identify key barrier: high entry barriers like patents or regulations block competitors.
• Consider economies of scale: cost advantages from large production can create natural monopolies.
• Match to options: select combination with high barriers and possible scale economies.

Why A is correct:

• Monopolies feature high barriers to entry (e.g., legal restrictions) and possible economies of scale, as per economic theory, allowing one firm to dominate efficiently.

Why the others are wrong:

• B: Economies of scale are possible in monopolies, not impossible.
• C: Low barriers allow competition, preventing monopoly formation.
• D: Low barriers and impossible scale economies describe competitive markets, not monopolies.

Final answer: A