which statement is true about the relationship between a monopoly and its competition in a…
which statement is true about the relationship between a monopoly and its competition in a market?\nmonopolies are formed when they buy out their competition in a market.\nmonopolies thrive when they have competition.\ncompetition in the market ensures that monopolies charge fair prices.\ncompetition in the market helps monopolies to develop.
Answer
Brief Explanations:
- A monopoly is a market structure where there is a single seller. When a monopoly buys out its competition (other firms in the market), it can control the supply and potentially increase its market power and profits.
- Monopolies do not thrive when they have competition as competition would limit their control over price and quantity.
- Competition in the market does not ensure that monopolies charge fair prices. Monopolies, by nature, can set prices higher (in the absence of regulation) as they face no or little competition.
- Competition in the market does not help monopolies to develop. In fact, competition is a threat to a monopoly's existence as it can erode the monopoly's market share.
Answer:
Monopolies are formed when they buy out their competition in a market.