Pure monopoly is not studied because of its descriptive realism, but because it is a stepping stone toward more realistic models.

Question

Quizplus · Accepted Answer

Pure monopoly is an extreme and unrealistic concept in the real world. However, studying it helps us understand the fundamental concepts of market power, pricing strategies, and impact on consumer welfare. It serves as a starting point to build more realistic models that capture the complexities of actual markets.

Pure Monopoly Is Not Studied Because of Its Descriptive Realism