A monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers.Consider the market for taxi services. In order to own and operate a taxi, drivers are required to obtain a taxi medallion.Which of the following best explains the barriers to entry that exist in this scenario?

The earliest and most reliable way to shield a company from competition is through legal restrictions. The right to purchase and sell products may be restricted by governments. To keep spectators safe, the racetrack is surrounded by concrete barriers. Soil erosion is prevented by the tree's roots.

What does a legal barrier serve as?

A barrier may serve to delineate the perimeters of a facility and can be either a built-in or natural obstruction to passage. A barrier's main function is to stop intruders from entering a space. The most frequent obstruction in the way of vehicles is a road block.

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