Answer to Question #76035 in Microeconomics for bangalie
Some factors favours the monopolist for such over –investing are economies of scale, locational advantages, high sunk costs associated with entry, restricted ownership of key inputs, and government restrictions . But if we restrict these factors then it might be restrain the monopolist from such over-investing.
Answer: Barriers to entry.
Location advantage, high sunk costs, government restriction etc.
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