1. Sources of monopoly power A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded falling to zero. The main way it retains its market power is through barriers to entrythat is, other companies cannot enter the market to create competition in that particular industry. Complete the following table by indicating which barrier to entry appropriately explains why a monopoly exists in each scenario. Barriers to Entry Exclusive Government- Ownership of a Created Economies Scenario Key Resource Monopolies of Scale In order to own and operate a taxi, drivers are required to obtain a taxi licence. 0 O O The Aluminum Company of America (Alcoa) formerly controlled all U.S. sources of bauxite, a key component in the production of aluminium. Given that Alcoa did not 0 O O sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminium industry from the late 19th century until the 19405. In the public water industry, low average total costs are obtained only through largescale production. In other words, the initial cost of setting up all the O O O necessary pipes makes it risky and, most likely, unprotable for competitors to enter the market