Q85
Which is a condition for existence of monopoly?
A.
Big size
B.
Identical product
C.
Absence of government taxes
D.
No close substitute
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
No close substitute is a condition for existence of monopoly. If a close substitute exists, then the monopoly cannot exist. Remember, a monopoly can only exist when the cross-elasticity of the product that the monopolist produces is zero.