BUISENESS MANAGEMENT
BUSINESS STRUCTURE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A local water company is the sole provider of water for a small town.
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A dry cleaner specializes in environmentally friendly cleaning methods.
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A farmer produces green beans for sale at a farmer’s market.
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A small number of cereal companies produce most of the cereal on the market.
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Detailed explanation-1: -A monopoly is a firm who is the sole seller of its product, and where there are no close substitutes. An unregulated monopoly has market power and can influence prices. Examples: Microsoft and Windows, DeBeers and diamonds, your local natural gas company.
Detailed explanation-2: -Which scenario is an example of a monopoly? A local water company is the sole provider of water for a small town.
Detailed explanation-3: -The U.S. markets that operate as monopolies or near-monopolies in the U.S. include providers of water, natural gas, telecommunications, and electricity.
Detailed explanation-4: -The restaurant industry (monopolistically competitive nationwide) provides an example of a monopolistically competitive market. In most areas, there are many firms, each is different, and entry is easy. Each product has many close substitutes sold by different firms, including other restaurants, fast-food outlets.