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Homework answers / question archive / For a pure monopoly to exist, which statement must be true? a
For a pure monopoly to exist, which statement must be true?
a. A pure monopoly is characterized by single supplier.
b. A pure monopoly is a market structure in which no close substitute products are available.
c. A pure monopoly exists when entry and survival of potential competitors is extremely unlikely.
d. All of the above.
The answer is d).
A pure monopoly consists of a single firm that serves the entire market. For the monopolist to guarantee market powers, there must be no close substitutes to the product produced by the monopolist. To prevent competition from competitors, there must also be barriers to entry for potential entrants.
