All of the Following Are Characteristics of a Monopoly Market

question 74

Multiple Choice

All of the following are characteristics of a monopoly market except which one?

• A)a single seller in the market
• B)an insurmountable barrier to entry exists
• C)the firm is a price- taker
• D)no close substitutes to the good produced in the market

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Definitions:

Covert Collusion

An implicit, non-public agreement between firms to fix prices, limit production, or divide markets, without explicit communication.

Allocative Efficiency

A state of the economy where resources are allocated in a way that maximizes the overall benefit to society.

Productive Efficiency

Occurs when a good or service is produced at the lowest possible cost, utilizing all resources efficiently.

Cartel

A formal agreement among firms (or countries) in an industry to set the price of a product and establish the outputs of the individual firms (or countries) or to divide the market for the product geographically.