Question

If we use a narrow definition of monopoly, then a monopoly is defined as a firm?

1) that has been granted special production rights by the government.
2) that can ignore the actions of all other firms because it produces a superior product compared to its rivals' products.
3) that can ignore the actions of all other firms because it produces a product for which there are no close substitutes.
4) that has the largest market share in an industry.

Answer 1

A monopoly is defined as a firm that produces a product for which there are no close substitutes.

Step-by-step explanation:

A monopoly is defined as a firm that produces a product for which there are no close substitutes. Option 3) that can ignore the actions of all other firms because it produces a product for which there are no close substitutes is the correct definition of a monopoly. For example, Microsoft is considered a monopoly because it dominates the operating systems market, and there are no other operating systems that are direct substitutes for Windows.