A Monopoly Is Most Likely to Emerge in a Market

question 166

Multiple Choice

A monopoly is most likely to emerge in a market when

• A) the producers in the market have U-shaped average total cost curves.
• B) the price elasticity of demand for the product is high.
• C) the cost of entry and exit into the market is low.
• D) economies of scale are large relative to market demand.

---

Definitions:

Treasury Reserves

Funds or assets held by a country's treasury to manage the economy’s money supply, stabilize currencies, or finance emergencies.

Comparative Advantage

The economic principle that nations should produce and export goods in which they have the lowest relative cost of production.

Western European Countries

Nations located in the western part of Europe, often characterized by developed economies, democratic governance, and high living standards.

Foreign Oil

Oil that is sourced from countries other than one’s own, often importing to meet domestic demand.