The public power company is an example of which market structure?

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

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the characteristics of each market structure listed: Monopoly, Monopolistic Competition, Oligopoly, and Perfect Competition.
2. Step 2: Recall that a monopoly is a market structure where a single firm is the sole provider of a good or service, with significant barriers to entry preventing other firms from entering the market.
3. Step 3: Consider the nature of a public power company, which typically is the only provider of electricity in a region, often regulated by the government and without direct competition.
4. Step 4: Compare this with other market structures: Monopolistic competition involves many firms with differentiated products; Oligopoly involves a few firms dominating the market; Perfect competition involves many firms selling identical products with free entry and exit.
5. Step 5: Conclude that since the public power company is the sole provider and faces no direct competition, it fits the definition of a monopoly.