Which of the following phrases best describes a monopoly market?

• A. A single firm dominates the market and is the sole producer of a good or service.
• B. Consumers have perfect information and can choose among many suppliers.
• C. Firms freely enter and exit the market without barriers.
• D. Many firms compete by selling identical products.

Answer: (A)

Verified step by step guidance

1. Understand the definition of a monopoly market: it is characterized by a single firm that dominates the entire market and is the sole producer of a particular good or service.
2. Recognize that in a monopoly, there are significant barriers to entry that prevent other firms from entering the market and competing.
3. Note that consumers in a monopoly do not have many suppliers to choose from, unlike in competitive markets where many firms offer similar products.
4. Contrast this with perfect competition, where many firms sell identical products, and consumers have perfect information and freedom to choose among suppliers.
5. Conclude that the phrase 'A single firm dominates the market and is the sole producer of a good or service' best describes a monopoly market.