The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7

-A local monopoly is a firm that:
A)is the sole supplier of a good, without substitutes, in a specific geographic area.
B)is one of the suppliers of a good in a specific geographic area.
C)supplies all the products needed by consumers in a country.
D)produces to meet the requirement of only one consumer.
E)is one of the suppliers of a good that has a lot of substitutes, in a specific geographic area.

Question

The figure given below shows the aggregate demand and supply curves of a perfectly competitive market.Figure 10.7
 
-A local monopoly is a firm that:
A)is the sole supplier of a good, without substitutes, in a specific geographic area. 
B)is one of the suppliers of a good in a specific geographic area. 
C)supplies all the products needed by consumers in a country. 
D)produces to meet the requirement of only one consumer. 
E)is one of the suppliers of a good that has a lot of substitutes, in a specific geographic area.

Quizplus · Accepted Answer

A local monopoly is a firm that is the sole supplier of a good, without substitutes, in a specific geographic area. From the information given in the question, there is no indication that there are any other suppliers of the good in the specific geographic area, thus it can be concluded that the firm in question is a local monopoly.

The Figure Given Below Shows the Aggregate Demand and Supply