Which of the following is characteristic of a monopoly?
A)The absence of political power
B)Close substitute products
C)The ability to make an economic profit in the long run
D)Operating at peak efficiency

Question

Quizplus · Accepted Answer

A monopoly is characterized by the absence of competition, allowing the firm to have control over the price and output of its product. This often leads to the ability to make an economic profit in the long run, as there are no competitors to drive the price down. A monopoly may also have some degree of political power, as they may lobby for laws that protect their market power. Close substitute products (B) are a characteristic of a monopolistic competition market structure, not a monopoly. Operating at peak efficiency (D) is not a necessary characteristic of a monopoly, as there is no competition to push the firm to operate at its most efficient level.

Which of the Following Is Characteristic of a Monopoly