GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What of the following is a feature of a monopoly?
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There is plenty of competition
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Price is set freely by the consumers
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The product sold is unique
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There are very few barriers to entry
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Explanation:
Detailed explanation-1: -Selling costs are unique features of a monopolistic market.
Detailed explanation-2: -Since there is only one supplier, and firms cannot easily enter or exit, there are no substitutes for the goods or services. Therefore, a monopoly also has absolute product differentiation because there are no other comparable goods or services.
Detailed explanation-3: -Characteristics of a monopoly market Monopolies price goods as they want because they don’t have any competition. Without competition to drop prices to attract customers, monopolies are free to charge any price, making them the price maker. This also means the monopoly business becomes the controller of the product.
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