A commodity market has which type of market structure if there is one seller of the commodity, the commodity has no close substitute, and entry into the industry by another firm is prevented?

Introduction / Context:
Market structure analysis is central to understanding how firms set prices and output and how they interact with consumers. The extreme case of market power occurs when a single firm dominates an industry, faces no close substitutes, and is protected by barriers to entry. Such a structure has important implications for efficiency, consumer welfare, and regulation. This question asks you to identify the market structure described by these conditions, which is a classic textbook definition.

Given Data / Assumptions:

• There is one seller of the commodity in the market.
• The commodity has no close substitute available to consumers.
• Entry into the industry by other firms is prevented, either by legal, natural, or strategic barriers.
• We assume standard definitions of perfect competition, monopoly, oligopoly, and monopolistic competition.

Concept / Approach:
A monopoly is defined as a market structure where there is a single seller of a product with no close substitutes, and strong barriers to entry prevent new firms from entering the industry. This gives the monopolist substantial control over price and output. Perfect competition, by contrast, has many sellers and free entry, with products that are homogeneous. Oligopoly has a few large firms, and monopolistic competition has many firms offering differentiated products and relatively free entry. The conditions given in the question match the definition of monopoly exactly.

Step-by-Step Solution:
Step 1: Note that the market has one seller, which rules out perfect competition, oligopoly, and monopolistic competition, all of which involve more than one firm.Step 2: Recognise that the commodity has no close substitute, meaning consumers cannot easily switch to alternative products if the seller raises the price.Step 3: Observe that entry into the industry is blocked, indicating strong barriers to entry, which is a key feature of monopoly.Step 4: Compare these features to the definition of monopoly, which is a single seller, no close substitutes, and restricted entry.Step 5: Confirm that the other market structures do not satisfy all three conditions simultaneously.Step 6: Conclude that the appropriate market structure is monopoly.

Verification / Alternative check:
Examples such as a local water utility or an electricity distribution company in a region often match this pattern in practice: a single provider, essential service with no close substitutes, and legal or infrastructural barriers to entry. Textbooks consistently use such examples when explaining monopoly. Perfect competition, monopolistic competition, and oligopoly always involve more than one firm, so the case of one seller with barriers to entry is uniquely associated with monopoly. This confirms the classification.

Why Other Options Are Wrong:
Perfect competition (option A) is wrong because it requires many sellers, identical products, and free entry and exit. Oligopoly (option C) is incorrect because it involves a few large firms, not a single seller. Monopolistic competition (option D) has many firms selling differentiated products and generally free entry; it is very different from the protected single seller scenario described. Only monopoly matches the conditions of one seller, no close substitutes, and blocked entry.

Common Pitfalls:
Some learners confuse monopoly with monopolistic competition due to similar naming. It is important to remember that the "mono" in monopoly means one seller, whereas monopolistic competition still has many sellers with differentiated products. Another pitfall is ignoring the requirement of no close substitutes; a firm that has a large market share but faces effective substitutes is not a true monopolist. Paying attention to all the listed characteristics helps avoid misclassification.

Final Answer:
The market structure described is a Monopoly.