ACCA Applied Knowledge · Business and Technology · Microeconomic factors
Which of the following is the defining feature of a monopoly market structure?
A monopoly is defined by a single seller supplying the whole market, protected by high barriers to entry. A few dominant interdependent firms is an oligopoly, while many price-taking sellers of identical goods is perfect competition.
- AA single seller supplies the whole market and barriers to entry are highCorrect
- BA few large firms dominate and each reacts to the others' pricing
- CMany small firms sell identical products and are price takers
Explanation
A monopoly exists where one firm is the sole supplier and barriers stop others entering. A few dominant firms describes an oligopoly, and many firms selling identical products who are price takers describes perfect competition.
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