Final answer:
A government granting a patent to a pharmaceutical company protecting an experimental cancer treatment and allowing only that company to produce and sell the treatment is an example of a monopoly. The correct option is A.
Step-by-step explanation:
A government granting a patent to a pharmaceutical company protecting an experimental cancer treatment and allowing only that company to produce and sell the treatment is an example of a monopoly. A monopoly is a market structure where a single firm has exclusive control over the production and sale of a product or service, with no close substitutes available.
In this case, the patent grants the pharmaceutical company the exclusive legal right to make, use, and sell the cancer treatment for a limited time. This creates a barrier to entry for other firms, preventing them from entering the market and competing with the patented drug. As a result, the pharmaceutical company enjoys sole control and can set prices and determine the supply of the treatment.
It is important to note that a monopoly can have both positive and negative impacts. While it may allow the patent holder to recoup their investment in research and development (R&D) and incentivize innovation, it can also lead to higher prices and limited access to the treatment for consumers.