pure monopolies are relatively rare in the real world because a. most goods have close substitutes b. monopolization of market is not profit maximizing c. only publicly owned companies can be pure monopolies d. all of the above?
What do you think the answer is? Please post it, and we'll be glad to comment.
The answer is a. most goods have close substitutes.
To arrive at this answer, we can analyze each option:
a. most goods have close substitutes: This is a valid reason why pure monopolies are relatively rare in the real world. Most goods and services have substitutes or alternatives available in the market. Consumers have the choice to switch to similar products if the monopolistic firm raises prices or offers poor quality products.
b. monopolization of the market is not profit maximizing: This is not a correct reason because monopolies do strive to maximize their profits. In a monopolistic market, the firm has full control over the supply of the product or service, allowing them to dictate prices and maximize their profits.
c. only publicly owned companies can be pure monopolies: This is not entirely accurate as pure monopolies can be established by both privately and publicly owned companies. Ownership does not determine whether a monopoly exists or not.
So, the correct answer is a. most goods have close substitutes.