What market situation leads to a higher value of goodwill?

Monopoly condition or limited competition

A market situation characterized by a monopoly condition or limited competition tends to lead to a higher value of goodwill. In such a market environment, a firm has the advantage of being the sole provider of goods or services or faces minimal competition. As a result, the firm can often earn higher profits and enjoy a larger market share. The presence of limited competition allows the firm to establish a strong reputation, build customer loyalty, and maintain pricing power. These factors contribute to the firm's ability to generate excess earnings and enhance the value of goodwill.