Consider the market for aluminum

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Consider the market for aluminum. The Aluminum Company of America (Alcoa) used to control all U.S. sources of bauxite, a key ingredient in the production of aluminum. Given that Alcoa did not sell bauxite to any other companies, Alcoa was a monopolist in the U.S. aluminum industry from the late-nineteenth century until the 1940s. Which of the following best explains the barriers to entry that exist in this scenario?

Increasing returns to scale

Legal barriers

Exclusive ownership of a necessary resource

Reference no: EM131009709

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