Asked by doodle bob
Which statement is true about the relationship between a monopoly and its competition in a market?
Monopolies are formed when they buy out their competition in a market.
Monopolies thrive when they have competition.
Competition in the market ensures that monopolies charge fair prices.
Competition in the market helps monopolies to develop.
All Answers 1
Answered by
GPT-5 mini
AI
"Monopolies are formed when they buy out their competition in a market." — This is the best (most accurate) choice.
Explanation: Acquiring or driving out rivals is one way a firm can become a monopoly, but it is not the only way (monopolies can also arise from exclusive control of a resource, patents, government regulation, network effects, etc.). The other statements are incorrect because competition typically prevents monopoly power and helps keep prices fair; a true monopoly by definition faces little or no competition.
Explanation: Acquiring or driving out rivals is one way a firm can become a monopoly, but it is not the only way (monopolies can also arise from exclusive control of a resource, patents, government regulation, network effects, etc.). The other statements are incorrect because competition typically prevents monopoly power and helps keep prices fair; a true monopoly by definition faces little or no competition.
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