Which of the Following Is a Distinct Characteristic of a Pure

question 81

Multiple Choice

Which of the following is a distinct characteristic of a pure monopolistic economy?

• A) many small suppliers, with virtually identical products
• B) small number of suppliers with products, which can be distinguished in important ways
• C) only one supplier, with monopoly granted by government mandate
• D) only one supplier, with monopoly achieved by innovation and specialization
• E) few suppliers, with products that can be distinguished but are similar enough to be replacements

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Definitions:

Economic Profit

The variance between collective earnings and complete expenditures, encompassing both overt and covert costs.

Normal Profit

The minimum amount of profit needed for a company to remain competitive in the market; it equals the total opportunity costs of a firm.

Economic Profits

The surplus or profit earned by a firm or individual after accounting for both explicit and implicit costs.

Purely Competitive Industry

An industry characterized by many small firms producing identical products where no single firm can influence the market price.