A firm is a monopoly if:
A)MR decreases with output.
B)no other firm produces the same good or a close substitute.
C)MR increases with output.
D)its AC is falling as output rises.

Question

Quizplus · Accepted Answer

A firm is a monopoly if it is the sole producer of a good and there are no close substitutes available in the market. This means that there is no competition for the firm, giving it the power to set the price of the good. The other options (A, C, and D) do not define a monopoly. MR (marginal revenue) may increase or decrease with output depending on the market structure, and falling AC (average cost) is not a requirement for a firm to be a monopoly.

A Firm Is a Monopoly If