Which of the following statements about the market structure of monopoly are correct?

a. A monopoly involves a market one or a few major firms.

b. The monopolist can charge any price she wishes and still operate at maximum profit.

c. The demand curve faced by the monopolist is the same as the total industry demand curve.

d. The monopolist is a "price taker." The monopoly is normally a huge firm such as Wal-mart.

Question

Darren Atkinson

Business

29 April, 08:21

Which of the following statements about the market structure of monopoly are correct?

a. A monopoly involves a market one or a few major firms.

b. The monopolist can charge any price she wishes and still operate at maximum profit.

c. The demand curve faced by the monopolist is the same as the total industry demand curve.

d. The monopolist is a "price taker." The monopoly is normally a huge firm such as Wal-mart.

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Answers (1)

Know the Answer?

Damaris Dyer · Answer 1

a. A monopoly involves a one market or a few major firms.

b. The monopolist can charge any price she wishes and still operate at maximum profit.

d. The monopolist is a "price taker." The monopoly is normally a huge firm such as Wal-mart.

Explanation:

The market structure of monopoly is characterized by profit maximization, higher barriers to entry, price makers i. e they decide the price of the goods to be sold in the market. Thus create price discrimination and the existence of a single seller. Sources of monopoly power are economies of scale, economic barriers, legal barriers, and non-substitutable goods.