There are a number of factors which give rise to monopoly power. Sometimes these are called causes of monopoly or the basis of monopoly power.

Patent rights over a product or production process. This may occur because the law forbids other firms or individuals to deal in the commodity e.g. book writers ( authors) have patent rights in form of copyrights forbidding other people from reproducing their work.

Exclusive control of a natural resource or a factor of production may lead to the emergence of monopoly. Such control over strategic natural resources like mineral deposits and fresh water leads to emergence of what is called natural monopolies. Example of natural monopolies in Uganda are Uganda Wildlife Authority (U.W.A) , Uganda electricity Board (U.E.B) etc.

Long distance between producers of a commodity such that each producer becomes a monopolist in his locality.  Such monopolists are called spatial monopolies.

State/statutory monopolies; These are monopoly firms established by act of law / parliament and mandated by government to control particular resources or means of production. State monopolies are large undertakings controlling strategic resources and may also be seen to exist as natural monopolies.

Protectionism by government through licensing and imposition of foreign trade barriers to exclude foreign competitors. Eventually, domestic producers will become monopolies of the local market.

Large initial capital input. The cost and technology required to establish a plant may be too high to warrant other outside investors into the industry. So the old firm which has even attained economies of scale continues to enjoy monopoly power.

Take-over and merger monopolies-  Take -over is when one firm buys up and takes over the assets and management of another firm. Whereas, a merger is formed when two or more firms combine their assets and managements to achieve stronger market position. Both arrangements result into a monopoly firm.

The size of the market. The market may be too small to warrant the entry of many firms into the industry and so the first firm acquires monopoly status.

Collusive / collective monopoly - Several firms come together in a formal or informal agreement known as a cartel to achieve monopoly power such firms may fix quotas for themselves and adopt a limit pricing behavior accompanied by heavy advertisement to prevent entry of new firms in the industry.

Entry restrictions may also cause monopoly. Certain professional organizations maintain difficult entry requirements into their organisations, hence keeping themselves in a monopolistic position.

The popularity and reputation acquired from the market. An enterprise or firm may emerge as a monopoly once its products have acquired high reputation say due to their high quality.

Existence of perfect competition- Here since there is freedom of entry and exit, inefficient firms are out-competed leaving the industry. The efficient firm which remains in the industry enjoying economies of scale becomes a monopoly.

Note: A quota is the maximum amount of output agreed on for each firm to put on the market. Limit pricing is the setting of the price at which to sell the commodity at a very low level with the aim of preventing new firms from entering the market.