Which of the following is a potential barrier to entry into a monopoly market?

• A. Large number of small sellers
• B. Perfectly elastic demand curve
• C. Free access to technology for all firms
• D. Ownership of a key resource by a single firm

Answer: (D)

Verified step by step guidance

1. Understand the concept of barriers to entry: These are obstacles that prevent new firms from entering a market and competing with existing firms, especially monopolies.
2. Analyze each option in terms of whether it restricts new firms from entering the market:
3. - A large number of small sellers typically indicates a competitive market, not a barrier to entry.
4. - A perfectly elastic demand curve means firms are price takers, common in competitive markets, so it is not a barrier to entry.
5. - Free access to technology for all firms lowers entry costs, so it is not a barrier to entry.
6. Recognize that ownership of a key resource by a single firm restricts other firms from accessing essential inputs, creating a significant barrier to entry and enabling monopoly power.