Suppose that Comcast is the only provider of internet service in a city. Which market structure does this scenario best represent?

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

Answer: (B)

Verified step by step guidance

1. Identify the key characteristic of the market: Comcast is the only provider of internet service in the city, meaning there is a single seller.
2. Recall the definitions of market structures: A monopoly is a market with a single seller, an oligopoly has a few sellers, monopolistic competition has many sellers with differentiated products, and perfect competition has many sellers with identical products.
3. Since there is only one provider, the market structure cannot be oligopoly, monopolistic competition, or perfect competition because those require multiple sellers.
4. Conclude that the market structure is a monopoly because a single firm controls the entire supply of the product or service in the market.
5. Understand that in a monopoly, the firm has significant market power to set prices, unlike in more competitive market structures.