A monopolist, unlike a competitive firm, has some market power. It can raise its price, within limits, without the quantity demanded felling to zero. The main way it retains its market power is through barriers to entry-that 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.
In the public water industry, low average total costs are obtained only through large-scale production. In other words, the initial cost of setting up all the necessary pipes makes it risky and, most likely, unprofitable for competitors to enter the market.
The Aluminum Company of America (Alcoa) formerly controlled all U.S. sources of bauxite, a key component in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late-nineteenth century until the 1940s.
In order to own and operate a taxi, drivers are required to obtain a taxi medallion.

In the public water industry - ECONOMIES OF SCALE. It is very expensive to set up a water distribution system, and after it starts to work the costs of keeping it working are very small. So even if a new competitor tries to enter the market, the water company can just lower its prices to make the business unfeasible for the competition.

ALCOA - ACCESS TO SUPPLIERS. Since ALCOA controlled all the supply of bauxite, no company could produce aluminum unless they imported bauxite which would increase their production costs.

Taxis - GOVERNMENT REGULATION. Since taxi licenses (or medallions) are handed out by local governments, it's them that determine how many taxis will offer their services in the city.