Question

Under the theory of monopoly, there is no separate theory of the firm and industry, _________.

• A. the monopoly is a rare case
• B. the monopoly firm itself is an industry
• C. in a monopoly market, there will be only one product
• D. in a monopoly market, there will be no firm

Answer 1

The correct option is B the monopoly firm itself is an industry

Monopoly is a situation where there is a single producer who can control the firm's output as well as set the prices. There is no competition in this type of business. The single firm here represents the industry. Hence, under the theory of monopoly, there is no separate theory of the firm and industry and the monopoly firm itself is an industry.