A firm can be the sole supplier of a good and is still not a monopolist if
A) the firm is not large.
B) the good produced is not important to the economy.
C) the firm is not making excessive profits.
D) there are very close substitutes for the good.

Question

Quizplus · Accepted Answer

A firm can only be considered a monopolist if it has the power to control the price and output of a good in the market. If there are very close substitutes for the good, the firm will not have this power, as consumers can easily switch to a substitute if the price or quality of the good is not favorable. Therefore, even if the firm is the sole supplier, it does not have the characteristics of a monopolist.

A Firm Can Be the Sole Supplier of a Good