Question

if an idea has not been implemented because a monopoly producer has placed a barrier to...

if an idea has not been implemented because a monopoly producer has placed a barrier to entry, the circumstances are not normal due to:

Multiple Choice

  • innovation.

  • market failure.

  • intervention.

  • goals other than profit.

Business   Economics   
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Answer #1

It shall be noted that a monopoly is a single firm in the market. There is a complete restriction on the entry of new firms in the market.

It shall be noted that existence of a monopoly market is a market failure. According to general equilibrium economics, a free market is an efficient way to distribute goods and services, while a monopoly is inefficient. Inefficient distribution of goods and services is, by definition, a market failure.

A monopoly is profit-maximizing firm. In a monopoly market, if there were interventions or innovations, it is likely that the idea could have got implemented.

Thus, if an idea is not implemented because a monopoly producer has placed a barrier to entry, it is due to market failure.

Hence, the correct answer is market failure

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