Question

The Aluminum Company of America (ALCOA) at one point owned 90% of the world's supply of bauxite which is the key ingredient to make aluminum. Which type of barrier to entry did ALCOA use to try to establish a monopoly?

Answer 1

ALCOA used the barrier to entry known as control of a physical resource to try to establish a monopoly by controlling the majority of the world's supply of bauxite.

Step-by-step explanation:

ALCOA attempted to establish a monopoly by using the barrier to entry known as control of a physical resource. They controlled most of the world's supply of bauxite, a key mineral used in making aluminum. By controlling the supply of bauxite, other firms were unable to produce enough aluminum to compete with ALCOA.