To have a monopoly in an industry, the key factor is having barriers to entry that are so high that no other firms can enter the industry. This means that the barriers prevent new competitors from easily joining the market and competing against the monopolistic firm. These barriers could include:
1) Control over essential resources: The monopoly may have exclusive access to crucial resources required to produce a good or service, making it difficult for new firms to acquire these resources at a reasonable cost.
2) Economies of scale: The monopoly might benefit from significant economies of scale, where the average cost of production decreases as output increases. New entrants would struggle to reach the same cost efficiencies due to the monopoly's existing scale of operations.
3) Legal barriers: In some cases, monopolies can be established through legal means such as patents, copyrights, or government licenses that give the firm exclusive rights to produce or sell a particular product or service.
4) Brand loyalty or customer switching costs: Monopolies can also maintain their dominant position by building strong brand loyalty among consumers or by creating high switching costs that make it challenging for customers to switch to a competitor's product.
In summary, to have a monopoly in an industry, the presence of significant barriers to entry is crucial, as they prevent new competitors from entering the market and challenging the monopolistic firm's position.
