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WGU Global Economics for Managers Exam - Topic 5 Question 4 Discussion

What are common types of barriers to entry that can cause a monopoly? (Choose TWO.)
A) A single firm owning a key resource and B) Economies of scale in the production process
C) Perfect information
D) Elastic demand
E) Free entry and exit

WGU Global Economics for Managers Exam - Topic 5 Question 4 Discussion

Actual exam question for WGU's Global Economics for Managers exam
Question #: 4
Topic #: 5
[All Global Economics for Managers Questions]

What are common types of barriers to entry that can cause a monopoly? (Choose TWO.)

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Suggested Answer: A, B

In Global Economics for Managers, monopolies arise when barriers to entry prevent competitors from entering a market. Two common barriers are control of a key resource and economies of scale, making options A and B correct.

When a single firm owns a unique or scarce resource, competitors cannot produce the good without access to that resource. Economies of scale create monopolies when one firm can produce at a lower average cost than multiple firms due to high fixed costs.

Options C, D, and E promote competition rather than monopoly.

Thus, options A and B correctly identify monopoly-creating barriers to entry.


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Huey
10 hours ago
I practiced a similar question, and I think A is definitely one of the answers. But I'm confused about the second one; maybe B or C?
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Son
6 days ago
I'm not entirely sure, but I feel like economies of scale could be a barrier. It seems like larger firms can produce at lower costs, making it hard for new entrants.
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Alise
11 days ago
I think A and B might be the right answers. I remember studying how owning a key resource can really limit competition.
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Providencia
16 days ago
I practiced a question like this before, and I think A and B were the answers too. They seem to fit the definition of barriers to entry.
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Graciela
2 months ago
I feel like C and D could be distractions here. Perfect information doesn't really create a monopoly, right?
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Dino
2 months ago
I'm not entirely sure, but I remember something about economies of scale being a big deal in monopolies. Maybe B and A?
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Julian
2 months ago
I think A and B are the right answers. A single firm owning a key resource definitely sounds like a barrier.
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