Exploring Economics
7th Edition
ISBN: 9781305465596
Author: Sexton
Publisher: Cengage
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Question
Chapter 13, Problem 1P
To determine
To find:
Whether the given option is a
Expert Solution & Answer
Answer to Problem 1P
The option a. Mrs. K (an actress), option b. DB Diamond Company and option c. The only doctor in a small town can be considered as monopoly.
Explanation of Solution
Mrs. K (an actress), DB Diamond Company and the only doctor in a small town, all these hold the characteristics of a monopoly firm. Mr. K is not the only actress, but she has a monopoly over her service or acting and she has full control over the price of her service. Similarly, the DB diamond company enjoys the largest market share of the world. Hence, the diamond company can be considered as monopoly.
The only doctor in a small town has a monopoly and he or she is the single seller of the service. Hence, the doctor can enjoy all the market share. Thus, the doctor can be considered as monopoly.
The F motor company cannot be a monopoly, it can be oligopoly. This type of company is not the only single seller in the market. However, in field of motor companies there are very few companies and they sell almost close substitutes. Hence, it is a case of oligopoly.
Economics Concept Introduction
Monopoly market:
Monopoly refers to that market structure, where a single seller enjoys the largest market share along with many buyers and the product sold by monopoly have no close substitutes. In the monopoly market, the seller is free to charge any price for their product and the entry of new firms in this market is very difficult.
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