alleryStart learning →Which of these is given as an example of a pure monopoly?
AA specialty clothing store in a shopping district
BAn airline competing on a busy international route
CA farm selling its wheat through a commodity exchange
DA gas or water company supplying a whole area
Answer & Solution
Correct answer: D. A gas or water company supplying a whole area
1. Public utilities such as gas and water companies are pure monopolies.
2. Some monopolies exist because a government order outlaws competition in that service.
3. Utilities such as gas, water and cable television are the examples listed for this structure.
4. Specialty clothing retail is monopolistic competition and airlines are an oligopoly.
5. Wheat sold through an exchange is the standard example of perfect competition.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.7 Competing in a Free Market_
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