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CMA Foundation · Fundamentals of Business Economics and Management · Forms of Market

Which of the following is the defining feature of a pure monopoly market?

A pure monopoly is characterised by a single seller of a product with no close substitutes, protected by barriers to entry. Many sellers with differentiated goods is monopolistic competition, two sellers is duopoly, and one buyer is monopsony.

  1. AA single seller with no close substitutes and barriers to entryCorrect
  2. BMany sellers offering differentiated products
  3. CTwo sellers dominating the market
  4. DA single buyer facing many sellers

Explanation

Pure monopoly means one seller controls the whole supply of a product that has no close substitutes, and entry by others is blocked. Many sellers with differentiated products describe monopolistic competition, two sellers describe duopoly, and a single buyer is monopsony.

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