In which type of market structure is an industry or market dominated by a single seller of a product, with no close substitutes available to consumers?

Introduction / Context:
Market structure is a fundamental concept in microeconomics that helps describe how many firms operate in a market, how they interact, and how they influence prices and output. Different structures such as perfect competition, monopolistic competition, oligopoly, and monopoly have distinct characteristics in terms of the number of sellers, the nature of products, and the degree of control over price. This question focuses on the case where a single seller dominates the market and the product has no close substitutes, which is a textbook scenario used to define a particular market structure.

Given Data / Assumptions:

• The market or industry is dominated by a single seller.
• The product supplied by this seller has no close substitutes available to consumers.
• Entry into the market is difficult or blocked for other firms.
• Standard definitions of oligopoly, monopoly, duopoly, and monopolistic competition are used from microeconomics.

Concept / Approach:
A monopoly is a market structure in which there is a single seller (or firm) that produces and sells a product with no close substitutes. The monopolist faces the entire market demand curve and has significant control over the price, although it still cannot ignore demand conditions. Barriers to entry, such as legal restrictions, patents, or high capital requirements, prevent other firms from entering. In contrast, an oligopoly has a few large firms, a duopoly has exactly two firms, and monopolistic competition has many sellers offering differentiated products. By matching these definitions with the description given in the question, we can identify the appropriate market form.

Step-by-Step Solution:
Step 1: Note that the question mentions only one seller dominating the market.Step 2: Recognise that the product sold by this seller has no close substitutes, which means consumers cannot easily switch to a competing product.Step 3: Recall that monopoly is defined as a market with a single seller and a product without close substitutes, often protected by strong barriers to entry.Step 4: Compare this with oligopoly, which requires a few sellers, not just one.Step 5: Duopoly requires exactly two sellers, and therefore does not match the description of a single dominating seller.Step 6: Monopolistic competition has many sellers offering differentiated but close substitute products, which again does not fit the scenario.Step 7: Thus, the only market structure that fully matches the description is monopoly.

Verification / Alternative check:
Consider classic examples often cited in textbooks: a local water supply company, a patent holder for a unique drug, or an electricity distribution company in a region. In such cases, there is typically only one firm serving the entire market for that specific product, and consumers cannot find close substitutes because the good or service is essential and unique. These examples are always described under the heading of monopoly, confirming that the definition of a single seller with no close substitutes aligns with the monopolistic market structure.

Why Other Options Are Wrong:
Oligopoly is wrong because it involves a small number of large firms, each of which has some market power, but not a single seller. Duopoly is incorrect because it refers to exactly two firms competing, not one. Monopolistic competition is wrong because it has many firms selling differentiated but similar products, and there are usually low barriers to entry. Only monopoly captures the idea of one firm, no close substitutes, and strong control over price and output in the industry.

Common Pitfalls:
Students sometimes confuse monopoly with monopolistic competition due to the similarity in terminology. It is critical to remember that monopoly has one seller, while monopolistic competition has many. Another mistake is overlooking the importance of close substitutes. A firm can be very large but still face competition from alternative products; in that case, it is not a true monopolist. Always check both the number of firms and the availability of close substitutes when classifying market structures.

Final Answer:
The market form dominated by a single seller with no close substitutes is called a Monopoly.