Homework: Monopoly Back to Assignment Attempts: Keep the Highest: / 1 1. Sources of monopoly power 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 digital cable television services. Suppose that Tomcat Cable is the only firm with enough capital resources to build the necessary infrastructure to deliver cable television to residents in a specific geographical region. As such, Tomcat is the only firm operating in this market. Which of the following best explains the barriers to entry that exist in this scenario? Legal restrictions Large sunk costs Control of a necessary resource Grade It Now Save & Continue Continue without saving x ] WE HEWLETT-PACKARD