If we use a narrow definition of monopoly, then a monopoly is defined as a firm
A)that has been granted special production rights by the government.
B)that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products.
C)that can ignore the actions of all other firms because it produces a product for which there are no close substitutes.
D)that has the largest market share in an industry.

Question

Quizplus · Accepted Answer

A monopoly is a firm that has exclusive control over the market for a particular product or service, such that there are no close substitutes. This means that the firm can charge a higher price than it would if there were competition, and still maintain its market power. While a firm with a large market share may have some degree of market power, it is not necessarily a monopoly if there are other firms offering similar products or services. Similarly, a firm that produces a superior product compared to its rivals may have a competitive advantage, but it is not a monopoly unless there are no close substitutes for its product.

If We Use a Narrow Definition of Monopoly, Then a Monopoly