Which of the following is a characteristic of an economic monopoly?

• A. High competition from multiple firms
• B. Significant control over pricing by a single entity
• C. Frequent changes in leadership
• D. Variety of product offerings

Answer: (B)

A characteristic of an economic monopoly is significant control over pricing by a single entity. In a monopoly, a single firm dominates the market for a particular good or service, which allows it to dictate prices without concern for competition. This control arises because the monopolist is the sole provider of a product that has no close substitutes, meaning consumers have limited options. As a result, the monopolist can set prices above the market equilibrium, maximizing profits.

In contrast, other characteristics such as high competition from multiple firms, frequent changes in leadership, and a variety of product offerings do not align with the definition of a monopoly. A monopoly is characterized by the lack of competition, which allows it to maintain its market position and pricing power consistently.