Question

Which of the following best describes a pure monopoly?

Multiple choice question.

One firm selling a single unique product, with ease of entry into the industry and little control over price

One firm selling a single unique product, where entry of additional firms is blocked and there is considerable control over price

Many firms selling a single unique product, where entry of additional firms is blocked and there is considerable control over price

One firm selling differentiated products or services and in which entry of additional firms is blocked

Answer 1

A pure monopoly is characterized by a single firm that controls the market for its unique product, with barriers that block the entry of other firms and significant power over pricing.

Step-by-step explanation:

The correct answer to which of the following best describes a pure monopoly is: One firm selling a single unique product, where entry of additional firms is blocked and there is considerable control over price.

A pure monopoly exists when a single firm dominates the entire market by being the only provider of a product or service, and no close substitutes are available.

In this economic situation, barriers exist that prevent other firms from entering the market, granting the monopolist significant market power over price, highly influenced by the demand curve.

Monopolies can arise naturally, as in the case of public water services, or through domination in a specific market, such as Microsoft's historical position in operating systems.

The government sometimes regulates natural monopolies by imposing price control to ensure fairness, acknowledging the efficiency of a single supplier in certain markets.