A firm can be the sole seller of a product but still not be a monopoly if
A)the firm is not making profits.
B)the firm is not large.
C)the product has many close substitutes.
D)the market price is high.
E)the cost of production is high relative to price.

Question

Quizplus · Accepted Answer

A firm can only be considered a monopoly if it has the power to set prices without facing significant competition. If the product has many close substitutes, there are other options for consumers, even if the firm is the sole seller of that particular product. Therefore, the firm does not have the power to set prices without facing competition and is not a true monopoly.

A Firm Can Be the Sole Seller of a Product