Which of the following is a characteristic of monopoly? A

Marketing Jan 12, 2021

Which of the following is a characteristic of monopoly?

A. A single firm in the industry

B. Perfectly elastic demand curve

C. Price equal to marginal revenue

D. Weak barriers to entry

E. Zero economic profits

Expert Solution

The correct answer is: A). A single firm in the industry.

Monopoly is the sole trader in the whole industry. He/she maximizes profit by producing where marginal revenue is equal to marginal cost. This enable him/her to restrict volume of output while driving price up. The monopoly faces a downward sloping demand curve and price is on MR=MC at profit maximizing output.

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