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n 3 of 40 > Buyers cannot easily substitute other products for those sold by a monopolist. O True O False
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Answer #1

Answer : true.

Monopoly is market structure with one seller sells products which have no close substitutes. Why monopoly had only one seller. It is because

1. Ownership of unique raw material or production technique. Thus this product can only be produced using unique rawmaterial or with unique production technique, which is possessed only by this monopolist. No other producer cannot produce similar product. Hence this commodity has no close substitute.

2.Patent rights.

Patent rights allows only monopolist to produce and sell this commodity hence restrict others to product similar product.

3.Government licensing: In the case of public utlities, government provides license to the company which supply product at least cost. Thus non-license firm cannot produce this commodity.

Thus Product deals with monopolist do not have close substitute. Thus buyers cannot easily substitute monopolits's commodity.

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