In a monopoly market, which of the following statements is true?

In a monopoly market, which of the following statements is true?
A . bargaining power of suppliers is strong
B . bargaining power of buyers is strong
C . There is strong rivalry
D . There is a threat of new entrants

View Answer

Answer: A

Explanation:

In a monopoly there is only one supplier- therefore their power is strong. Buyers in this market are price takers and their power is weak. There is generally a strong barrier to entry into a monopoly market so the threat of new entrants is low. There is no rivalry. There are many questions in the exam on Porter’s 5 Forces – see p. 39