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Which feature distinguishes a monopoly market from a perfectly competitive market?
AFirms that are price takers at the market price
BA large number of firms selling identical goods
CA single seller facing strong barriers to entry
DFree entry and exit driving profit to normal
Answer & Solution
Correct answer: C. A single seller facing strong barriers to entry
1. Perfect competition has many firms, free entry, and price-taking behaviour.
2. Monopoly has only one seller who constitutes the whole industry.
3. Strong barriers to entry let the monopolist keep rivals out.
4. The single seller plus entry barriers is the distinguishing monopoly feature.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 4 Unit III "Price-Output Determination under Different Market Forms", p.10_
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