A firm typically achieves its position as a monopolist as a result of:

a. A downward sloping demand for the product,

b. A small market and a constant average cost,

c. The absence of long-run profits in an industry,

d. Barriers to entry.

• The correct answer is d. Barriers to entry.

The main characteristic of a monopoly is the number of sellers. A monopolistic market has only one competitor in the industry. This is the result of the high barriers to entry into the industry. Some of the barriers to entry in a monopoly might be the capital requirements, control of resources, economies of scale, limiting pricing strategies, and legal barriers such as patents or copyrights. These barriers to entry restrict competition in the market. Therefore, the correct answer is option d. Option a. is incorrect because also monopolistic competition has a downward-sloping demand. Option b. is incorrect because a monopoly is not necessarily a small market and the average cost curve is u-shaped. Option c. is incorrect because monopolists can obtain positive economic profits in the long run.