Question

A monopoly firm is the only seller of a good or service that A) does not need to be advertised. B) has no close complements C) does not have a close substitute. D) has a perfectly elastic demand.

Answer 1

Answer:

C) does not have a close substitute.

Explanation:

A monopoly is a market structure where there is only a single seller but many buyers. The seller therefore has more bargaining power over buyers and is therefore the price maker; a monopolist decides and sets the price of the product. Since there is only one seller, it means that the good does not have close substitutes. However, a multi-product monopolist could sell goods or services that are close complements.