(i) The government restricts market entry.
(ii) Costs of starting a competing business are too high.
(iii) The number of options in the market confuses consumers.
(iv) No competition exists between producers.
Among the options provided, (ii) “Costs of starting a competing business are too high” is the most direct and accurate answer to the question of what helps enable an oligopoly to form within a market.
When the costs associated with starting a new business and competing in the market are prohibitively high, it becomes difficult for new entrants to overcome those barriers. This allows existing firms to maintain their market power and inhibits new competitors from entering the market. As a result, a small number of dominant firms can control the market, leading to an oligopoly.