Asked by Jelena Kosir on Jun 19, 2024
Verified
Which of the following best approximates a pure monopoly?
A) The foreign exchange market.
B) The Kansas City wheat market.
C) The only bank in a small town.
D) The soft drink market.
Pure Monopoly
A market structure where a single firm is the sole producer of a product or service with no close substitutes.
Small Town
A community with a small population, typically larger than a village but smaller than a city.
Foreign Exchange
The exchange of one currency for another or the conversion of one currency into another currency.
- Recognize the attributes and effects of unadulterated monopoly in economic structures.
- Assess the role of patents and technology in establishing and maintaining monopolies.
Verified Answer
LS
Lauren ShorrJun 20, 2024
Final Answer :
C
Explanation :
The only bank in a small town is the best approximation of a pure monopoly because there is only one supplier in the market with no close substitutes, and the supplier has a significant amount of market power to set prices. The other options include multiple suppliers and some level of competition or differentiation.
Learning Objectives
- Recognize the attributes and effects of unadulterated monopoly in economic structures.
- Assess the role of patents and technology in establishing and maintaining monopolies.