Papabear Corporation is a single seller of Wonderstuff, but there are two substitutes for Wonderstuff. Given this situation, Papabear
A) cannot be a monopoly because there are substitutes for Wonderstuff.
B) cannot be a monopoly because two substitutes make it a competitive market.
C) can still be a monopoly because it is unknown if the two substitutes are close substitutes.
D) acts as if it were competitive and takes the price set in the market.

Question

Quizplus · Accepted Answer

Papabear Corporation can still be considered a monopoly for Wonderstuff if the two substitutes are not close substitutes, meaning they do not offer the same utility or satisfaction to consumers. The presence of substitutes does not automatically negate monopoly status if those substitutes do not effectively compete with the monopolist's product.

Papabear Corporation Is a Single Seller of Wonderstuff, but There