The statement below is followed by four options. Each option is related to the item in the statement, but only one is always true. Select the option that always holds and makes the statement true.
"A monopoly market always has ______."
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → A single seller
The answer must hold for every monopoly market, without exception. An option that is present in most cases but can be missing in even one case is not always true.
Option (1) Government ownership of the firm — a private company that alone holds the patent for a product is a monopoly without being owned by the government.
Option (2) A single seller — monopoly means one seller of a product with no close substitutes; a market with several sellers is not a monopoly, so this is always true.
Option (3) Close substitutes for its product — this is never true: if close substitutes were sold, buyers could switch to them and the firm would not be a monopoly.
Option (4) A price fixed by the government — a monopoly firm is a price maker; one that the government does not regulate sets its own price.