A monopoly is a firm:
A) that is exempt from patent protection.
B) that sets price above marginal cost without concern that other firms will enter the industry.
C) without market power.
D) that sets price higher than or equal to marginal cost.

Question

Quizplus · Accepted Answer

A monopoly is a firm that is the sole provider of a good or service in the market, giving them the power to set prices without the threat of competition. Therefore, they can set prices above marginal cost (the cost of producing one additional unit) since there are no other firms to compete with.

A Monopoly Is a Firm