Final answer:
A monopoly is defined as a market structure where a single firm sells a product without close substitutes, giving it significant market power. The correct answer to the student's question is B. without a close substitute.
Step-by-step explanation:
A monopoly arises when there is a single firm that sells a product for which there are no close substitutes. This means that a monopoly has a great deal of market power, allowing it to charge any price it wishes, constrained only by the market demand curve. Examples like Microsoft, which dominates the operating systems market, illustrate monopolistic dominance due to a lack of close substitutes for its products.
In response to the student's question, the answer is B. without a close substitute. This is because in a monopolistic market, the firm has the power to set prices due to the absence of competition and substitute products.