Which market structure is defined by a single seller controlling the market?

Which market structure is defined by a single seller controlling the market?

• A. Monopoly
• B. Perfect competition
• C. Oligopoly
• D. Imperfect competition

Answer: (A)

A monopoly is defined by a single seller that controls the market. In this structure, one firm dominates supply, faces high barriers to entry, and can influence prices rather than taking the market price as given. The product may have no close substitutes, which reinforces the firm’s ability to set higher prices and earn outsized profits. This combination of market power and entry barriers is what distinguishes a monopoly from other market forms. That’s why this is the best answer: it matches exactly the idea of one firm being the sole source, with the power to shape prices and output. In contrast, perfect competition features many sellers with identical products and no single seller able to influence price; an oligopoly has a few dominant firms, not one; and imperfect competition is a broader category that includes several market forms but does not imply a single seller.

A monopoly is defined by a single seller that controls the market. In this structure, one firm dominates supply, faces high barriers to entry, and can influence prices rather than taking the market price as given. The product may have no close substitutes, which reinforces the firm’s ability to set higher prices and earn outsized profits. This combination of market power and entry barriers is what distinguishes a monopoly from other market forms.

That’s why this is the best answer: it matches exactly the idea of one firm being the sole source, with the power to shape prices and output. In contrast, perfect competition features many sellers with identical products and no single seller able to influence price; an oligopoly has a few dominant firms, not one; and imperfect competition is a broader category that includes several market forms but does not imply a single seller.