prohibit competition, technological advantages, and certain configurations of demand and supply. It then

discusses how a monopoly will choose its profit-maximizing quantity to produce and what price to charge.

While a monopoly must be concerned about whether consumers will purchase its products or spend their

money on something altogether different, the monopolist need not worry about the actions of other competing

firms producing its products. As a result, a monopoly is not a price taker like a perfectly competitive firm, but

instead exercises some power to choose its market price.

Access for free at openstax.org
9.1 • How Monopolies Form: Barriers to Entry 217

9.1 How Monopolies Form: Barriers to Entry

LEARNING OBJECTIVES

By the end of this section, you will be able to:

• Distinguish between a natural monopoly and a legal monopoly.

• Explain how economies of scale and the control of natural resources led to the necessary formation of legal

monopolies
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