Why Monopoly Arise o The fundamental cause of monopoly is barriers to entry. o Barriers to entry have three sources Ownership of a key resource The government gives a single firm the exclusive right to produce some good Costs of production make a single producer more efficient than a large number of producersWhy Monopoly Arise • The fundamental cause of monopoly is barriers to entry. • Barriers to entry have three sources: – Ownership of a key resource. – The government gives a single firm the exclusive right to produce some good. – Costs of production make a single producer more efficient than a large number of producers