Which market structure is defined by one company controlling the entire industry?

Which market structure is defined by one company controlling the entire industry?

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

Answer: (A)

Monopoly describes a market where one company dominates the entire industry, giving it significant influence over price and output since buyers have few or no close substitutes. This unique position—being the sole seller—explains why it’s the best fit for a scenario where one firm controls the whole market. In contrast, other structures involve multiple sellers: a few firms in an oligopoly, exactly two firms in a duopoly, or many firms in perfect competition where no single firm can set the price.

Monopoly describes a market where one company dominates the entire industry, giving it significant influence over price and output since buyers have few or no close substitutes. This unique position—being the sole seller—explains why it’s the best fit for a scenario where one firm controls the whole market. In contrast, other structures involve multiple sellers: a few firms in an oligopoly, exactly two firms in a duopoly, or many firms in perfect competition where no single firm can set the price.