Which of the following best describes a monopoly market?

• A. A few firms competing with differentiated products
• B. Many sellers offering identical products
• C. Free entry and exit for firms
• D. A single seller with no close substitutes for its product

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the definition of a monopoly. A monopoly is a market structure where there is only one seller or producer of a product or service.
2. Step 2: Recognize that in a monopoly, the single seller faces no direct competition because there are no close substitutes for the product offered.
3. Step 3: Compare this to other market structures: for example, perfect competition involves many sellers offering identical products, and monopolistic competition involves many firms with differentiated products.
4. Step 4: Note that free entry and exit of firms is a characteristic of competitive markets, not monopolies, where barriers to entry prevent other firms from entering.
5. Step 5: Conclude that the best description of a monopoly market is 'A single seller with no close substitutes for its product,' as this captures the essence of monopoly power.