Which of the following is a characteristic of monopoly?
A) The firm faces competition from many other firms.
B) The firm produces a product that has many close substitutes.
C) There are barriers to enter the market.
D) The firm's demand is perfectly elastic.
E) The firm produces a product identical to that produced by its many competitors.

Question

Quizplus · Accepted Answer

One of the defining characteristics of a monopoly is the presence of barriers to entry, meaning that it is difficult for other firms to enter the market and compete with the monopolist. This lack of competition allows the monopolist to maintain a higher level of market power and charge higher prices than in a more competitive market. The other options reflect characteristics of other market structures, such as perfect competition (A and B), a perfectly elastic demand curve (D), or monopolistic competition (E).

Which of the Following Is a Characteristic of Monopoly