Which statement is true?
A)All monopolies are large firms.
B)The monopolist produces a product similar to its competitors.
C)There is no such thing as a natural monopoly.
D)There are no close substitutes for a monopolist's product.

Question

Quizplus · Accepted Answer

A defining characteristic of a monopoly is that it has no close substitutes for its product. Choice A is false because monopolies can be small or large firms. Choice B is false because a monopolist does not have any close competitors. Choice C is debated among economists, but there are some industries where it is more efficient for there to be only one producer, such as natural gas or water utilities.

Which Statement Is True