A monopoly can have a high degree of market power because of all but
A)Control over key inputs.
B)Government-bestowed franchise rights.
C)A downward-sloping demand curve for its product.
D)The presence of many close substitutes for its product.

Question

Quizplus · Accepted Answer

The presence of many close substitutes for its product can limit a monopoly's market power. If there are many substitutes available, consumers have options other than purchasing the monopoly's product, and the company cannot charge prices as high as it could if there were no substitutes. Options limit market power.

A Monopoly Can Have a High Degree of Market Power