Which is the most accurate statement?
A)There are no limits to monopoly power.
B)The market limits monopoly power through the development of substitutes.
C)If there were just one wheat farm in the United States,it would have a natural monopoly.
D)There is no way that we can justify the existence of monopolies.

Question

Quizplus · Accepted Answer

While monopolies do have significant power, the development of substitutes by the market provide some limits to their power. This is because consumers may switch to substitutes if a monopoly charges too high a price or fails to provide good service. The statement in option A is false, as there are legal restrictions on monopolies, and option C assumes that a monopoly occurs naturally, which is not necessarily true. Option D is too extreme, as some monopolies may be justified if they provide benefits to society, such as patent monopolies for pharmaceuticals that promote innovation.

Which Is the Most Accurate Statement