Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
one seller
B
many differentiated products
C
few sellers
D
no barriers to entry
Understanding the Answer
Let's break down why this is correct
Answer
Perfect competition has many sellers who offer similar products, making it easy for customers to switch from one seller to another. In contrast, a monopoly has only one seller who controls the entire market for a specific product or service. This single seller can set prices without competition, which can lead to higher prices and less choice for consumers. For example, if there is only one company that provides water in a town, that company has a monopoly because no other businesses are selling water. Therefore, the relationship is that just as perfect competition features many sellers, a monopoly features just one seller.
Detailed Explanation
In a monopoly, there is only one seller in the market. Other options are incorrect because This answer suggests that there are many different products, but in a monopoly, there is only one product; This answer implies there are a few sellers, but a monopoly has just one.
Key Concepts
Market Structures
Firm Behavior
Price Control
Topic
Market Structures Overview
Difficulty
medium level question
Cognitive Level
understand
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