Th3.4: Characteristics of Monopoly

Question 1

Where does pure monopoly exist?

Answer 1

where one firm is the sole seller of a product in a market

Question 2

Pure monopoly rarely exists but how can a firm be legally considered as having monopoly power?

Answer 2

if it has more than 25% of the market

Question 3

What does the model assume?

Answer 3

there is only one firm in the industry, they short run profit maximise and there are high barriers to entry