alleryStart learning →A monopoly created because laws prohibit or severely limit competition is a:
ALocal monopoly
BPartial monopoly
CLegal monopoly
DNatural monopoly
Answer & Solution
Correct answer: C. Legal monopoly
1. Monopolies are sorted by what keeps rivals out.
2. One kind is natural monopoly, where the barriers to entry are something other than legal prohibition.
3. The other is legal monopoly, where laws prohibit or severely limit competition.
4. So the source of the barrier is what distinguishes the two.
_Source: OpenStax Principles of Microeconomics for AP(R) Courses 2e (CC BY 4.0), Ch 9 'Monopoly', sections 9.1-9.2_
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