A monopoly
A) always makes a profit.
B) can force consumers to purchase what it is selling.
C) is characterized by a single seller who produces a well-defined product for which there are no good substitutes.
D) always has naturally created barriers.
E) always has government-created barriers.

Question

Quizplus · Accepted Answer

A monopoly is characterized by a single seller who produces a well-defined product for which there are no good substitutes. This lack of competition allows the monopoly to have significant control over pricing and supply, resulting in potentially higher profits. However, it does not guarantee profits, as the monopoly must still consider factors such as demand and production costs.

Answer: B 
 While a monopoly may have the ability to force consumers to purchase what it is selling, this is not a defining characteristic of a monopoly. It is more accurate to say that a monopoly has significant market power, which can lead to the ability to control or influence pricing and supply.

Answer: D 
 While some monopolies may have naturally created barriers to entry, such as high startup costs or exclusive access to resources, this is not always the case. It is possible for a monopoly to arise from other factors such as government regulation or market consolidation.

Answer: E 
 Government-created barriers, such as patents or licensing requirements, can contribute to the creation or maintenance of a monopoly. However, not all monopolies are the result of government intervention.

A Monopoly