A monopoly exists when
A) A small number of firms are the only producers of a good.
B)A large number of firms are producing a good.
C) The government intervenes on behalf of consumers.
D) One firm produces all the output for a particular good or service.

Question

Quizplus · Accepted Answer

A monopoly exists when there is only one firm producing a good or service, with no close substitutes available in the market. In other words, the monopoly firm has complete control over the supply of the particular good or service, and can set the price at a level that maximizes profits. This lack of competition can lead to higher prices for consumers and reduced output in the market. Therefore, choice D is the correct answer.

A Monopoly Exists When