When one firm sells a good or service that has no close substitutes and a barrier blocks the entry of new firms,what type of market is this?
A) perfect competition
B) only monopoly
C) oligopoly
D) only monopolistic competition
E) either monopoly or monopolistic competition

Question

Quizplus · Accepted Answer

A market with a single seller of a good or service with no close substitutes and significant barriers to entry is characteristic of a monopoly. Perfect competition involves many small firms selling identical products with ease of entry and exit, while monopolistic competition involves many firms selling differentiated products with some ease of entry and exit. Oligopoly involves a small number of large firms that may or may not have close substitutes, but entry barriers may or may not exist. Therefore, only the option B, monopoly, fits the description given in the question.

When One Firm Sells a Good or Service That Has