Future Business Leader Achievments (FBLA) Economics Practice Exam

A market structure with a single seller is known as:

1. An oligopoly

2. A monopoly

3. A perfect competition

4. A duopoly

The correct answer is: A monopoly

A market structure with a single seller is defined as a monopoly. In a monopoly, one firm dominates the entire market for a particular good or service, which allows it to control prices and supply. This market power results from the lack of competition, as no other firms are offering the same or a similar product. In contrast, an oligopoly consists of a few firms that dominate a market, and there is some competition among them. Perfect competition involves many sellers and buyers, leading to an equilibrium in pricing where no single entity can influence the market. A duopoly is a specific type of oligopoly with only two sellers in the market. Therefore, the defining characteristic of a monopoly as having a single seller clearly distinguishes it from these other market structures.