Which of the following is not a characteristic of a monopoly?
A) the seller has market power
B) one seller
C) free entry and exit
D) a product without close substitutes
Monopoly is defined as the market structure where there is a single producer /seller that has the control over the entire market. The products sold by the single seller has no close substitutes which indicates that they have a direct demand , supply and prices of a product. The monopolist (single seller) aims in maximizing his/her profit .
There are two theories that explains how price is determined in monopoly. The two theories are :
- Trial Theory of Prof. Marshall
- Modern Theory or theory of Mrs. John Robinson.
Features of Monopoly
Some of the Features of Monopoly are as follows:
- Single Producer or Seller in the market.
- No close substitute product in the market.
- Independent price policy is adopted by Monopolist in the market.
- Buyers of Commodity are large in number.