Under conditions of pure monopoly:

Question

Quizplus · Accepted Answer

Under pure monopoly conditions, the firm has complete control over the market, and there are no close substitutes for the product being sold. This means that entry to the market is blocked, and there is no competition. The firm can act as a price maker, controlling the price of its product without fear of competition. Therefore, option D is the correct answer. Option A is incorrect because there are no close substitutes under pure monopoly conditions. Option B is incorrect because there may be advertising in order to create brand awareness and differentiate the product from potential substitutes. Option C is incorrect because the firm is not a price taker, but rather a price maker.

Under Conditions of Pure Monopoly