Which market structure has many buyers and a single seller with no close substitutes?

Which market structure has many buyers and a single seller with no close substitutes?

• A. Monopoly
• B. Oligopoly
• C. Perfect Competition
• D. Monopolistic Competition

Answer: (A)

A market with one seller and many buyers, where there are no close substitutes, is a monopoly. In this setup, the single firm is the only source of the product or service, so it can influence the price and output. The absence of close substitutes means customers can’t easily switch to an alternative if prices rise, giving the seller significant market power to set higher prices and restrict output to maximize profit. Barriers to entry—like control of a key resource, regulatory protection, or high startup costs—help the monopolist maintain this position. This combination of a lone seller, unique offering, and barriers to entry distinguishes it from other structures, where either many sellers or substitutes prevent a single firm from controlling price.

A market with one seller and many buyers, where there are no close substitutes, is a monopoly. In this setup, the single firm is the only source of the product or service, so it can influence the price and output. The absence of close substitutes means customers can’t easily switch to an alternative if prices rise, giving the seller significant market power to set higher prices and restrict output to maximize profit. Barriers to entry—like control of a key resource, regulatory protection, or high startup costs—help the monopolist maintain this position. This combination of a lone seller, unique offering, and barriers to entry distinguishes it from other structures, where either many sellers or substitutes prevent a single firm from controlling price.