ECONOMICS
COMPETITION AND MARKET STRUCTURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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They are evil.
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They are illegal.
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The have a unique product.
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The government supports them.
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Detailed explanation-1: -Monopolists often charge high prices for their goods. A price maker is an entity that has the power to dictate the price it charges because there are no perfect substitutes for the goods it sells.
Detailed explanation-2: -A monopoly exists when one supplier provides a particular good or service to many consumers. In a monopolistic market, the monopoly, or the controlling company, has full control of the market, so it sets the price and supply of a good or service.
Detailed explanation-3: -Unique product In a monopolistic market, the product or service provided by the company is unique. There are no close substitutes available in the market.
Detailed explanation-4: -Why must a monopoly supply a unique product? If it’s not unique, customers will buy alternative products at lower prices.
Detailed explanation-5: -A Monopoly Controls the Market As a result, the supplier can artificially restrict the supply of the product, thus creating scarcity and raising prices for consumers.