Question

In the market structure of monopoly, What are the characteristics?

1) there are entry barriers
2) the firm is a price taker
3) there are some close substitutes
4) elasticity of demand is high

Answer 1

A monopoly is a market structure characterized by one producer with high barriers to entry. It is a price maker and offers products with few substitutes. The elasticity of demand is low for a monopoly.

Step-by-step explanation:

A monopoly is a market structure characterized by one producer with a unique product and very high barriers to entry. Some of the characteristics of a monopoly include:

1. Entry barriers: Monopolies have strong barriers to entry that prevent or discourage other firms from entering the market.
2. Price maker: A monopoly has the power to set the price of its product since it has no direct competition.
3. Lack of close substitutes: Monopolies offer products that have no or few close substitutes in the market.
4. Low elasticity of demand: The demand for a monopoly's product tends to be inelastic, meaning that changes in price have a minimal impact on consumer demand.