Monopoly is a market structure in which:
A)there are significant barriers to the entry of new firms.
B)the firms face a perfectly elastic demand curve.
C)there are a large number of close substitutes for the good.
D)a homogeneous product is sold.
E)the firms are price takers.

Question

Quizplus · Accepted Answer

Monopoly is characterized by significant barriers to entry, which prevent new firms from entering the market and competing with the monopolist. This allows the monopolist to have market power and set prices above marginal cost. The other options do not describe a monopoly market structure.

Monopoly Is a Market Structure in Which