The artificial barrier to entry would arguably be anti-competitive pricing. Anti-competitive pricing could be further broken down into limit pricing, which refers to the case where monopolists set their prices below the expected average costs of a potential entrant, to deter them from entering the market since they will make losses.
Predatory pricing, on the other hand, is a similar concept, except it is used in such a way that existing competitors would be driven out of the market due to the making of subnormal profits. Therefore, anti-competitive pricing allows for the existence of monopolies, since potential and existing competitors are out of the way.
There are also other artificial barriers to entry such as those created by governments. Governments could support the creation of monopolies by giving patents and licenses to certain firms only. The issue of patents means that monopoly rights are given to a firm to produce a new product or use a new process for a specified time period. Such actions of the government can then allow for the existence of monopolies since such firms are given substantial market power.
One of which would be natural monopolies. A natural monopoly refers to a market where average costs are falling throughout the entire range of market demand, which makes it less costly for one firm to supply the entire market, hence supporting the existence of monopolies.
In conclusion, artificial barriers could more adequately explain the existence of monopolies. This is because most monopolies are run by governments whom create artificial barriers like patents and licenses to deter potential entrants. Therefore, upon evaluation, the existence of monopolies would be more significantly attributed to artificial barriers as compared to natural barriers. Hence, the statement should read that monopolies exist mainly because of artificial barriers to entry.
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