What defines a monopoly in a market context?

• A. A market with many buyers and few sellers
• B. A market with one seller and many buyers
• C. A market competitive with several providers
• D. A market where all firms share resources equally

Answer: (B)

A monopoly is defined as a market structure where a single seller dominates the entire market, effectively being the only provider of a particular product or service. This singular presence means that the monopolist has significant control over the pricing and availability of that product, as consumers have no alternative sources to turn to.

The scenario of one seller to many buyers distinguishes a monopoly from other market structures where competition exists. In a monopoly, the lack of competition allows the seller to set prices without being constrained by rivals, leading to potential issues such as reduced output and higher prices for consumers compared to a competitive market.

Understanding this concept is critical for analyzing the implications of monopolistic practices on consumers and the economy, including the potential for inefficiencies and lack of innovation.