In the context of monopoly, the term 'strategic group' refers to:

• A. A government agency that regulates monopolies
• B. A set of firms within an industry that follow similar strategies or have similar characteristics
• C. A group of consumers who have identical preferences for a monopolist's product
• D. A coalition of monopolists that collude to set prices

Answer: (B)

Verified step by step guidance

1. Understand that the term 'strategic group' is used in industrial organization and microeconomics to classify firms within an industry based on their behavior or characteristics.
2. Recognize that a 'strategic group' is not related to government agencies or regulatory bodies, so options involving government agencies can be excluded.
3. Identify that a 'strategic group' refers to firms, not consumers, so groups of consumers with identical preferences are not the correct definition.
4. Recall that a 'strategic group' involves firms that follow similar strategies or have similar characteristics, such as pricing, product quality, or technology.
5. Conclude that the correct understanding of 'strategic group' is a set of firms within an industry that follow similar strategies or have similar characteristics.