Which of the following is a legal barrier to entry that can help create monopoly power?
Correct answer: B. A government-granted patent
- A. A temporary fall in consumer income
- B. A government-granted patent
- C. A rise in the firm's variable cost
- D. A change in the market equilibrium price
Explanation
A patent gives its holder exclusive legal rights to use or sell an invention for a specified period. This prevents potential competitors from entering freely and can give the patent holder monopoly power.
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About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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