Question

Which statement is true about the relationship between a monopoly and its competition in a market?

Answer 1

In a monopoly market structure, only one firm is dominating a particular industry. Monopoly power exists when a single firm controls more than 25 percent of a market. A natural monopoly market structure can be due to natural advantages such as strategic location and abundance of natural resources. E.g Gulf countries have a monopoly in crude oil production because of many natural oil resources available there. There are no competitions in the market and the monopolist are in a position to decide the price of the product. The monopolist is a price maker.

Answer 2

A monopoly would have almost complete control over a market, and would have virtually no competition

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