Which statement about monopolies is correct?

• A. A market with several firms that share power.
• B. The government owning all production.
• C. A market with perfect competition.
• D. A single firm in a market that controls all the goods and services in a market; absence of competition.

Answer: (D)

Monopolies occur when a single firm dominates a market, with significant barriers preventing other firms from entering. In this setup, there are no close substitutes and the firm has substantial control over price and output because there’s effectively no competition. The description that fits this idea is one where one firm is the sole seller of all the goods and services in a market, facing no competition. That single-seller, market-power dynamic is the hallmark of a monopoly and explains why it can influence prices and restrict choices for consumers.

The other scenarios describe different market structures: a market with several firms that share power points to an oligopoly rather than a true monopoly; government ownership of production is a form of state control that doesn’t automatically define monopoly power; a market with perfect competition involves many firms and no single seller controlling the price. In short, the monopoly is about a single firm that effectively controls the entire market with no competitive pressure.