Final answer:
The statement is true; the power of a monopoly is indeed influenced by the availability of close substitutes for its product, which affects the firm's market control.
Step-by-step explanation:
The amount of power that a monopoly has is indeed closely linked to the availability of close substitutes for its product. The statement that the power of a monopoly is a function of whether there are close substitutes for its product is true. If there are no close substitutes, the firm has significant control over pricing and market conditions, and can be considered a monopoly. On the other hand, the presence of similar products from other firms reduces the level of control a single firm can exert, as consumers have alternative options.
This is why Microsoft, for example, is regarded as a monopoly in the operating systems market because there were few alternatives considered close enough to replace its products.