A monopolist is going to sell the product anyway, because there are no substitutes for the product. There is no need for differentiation, the product is the only one sold and there are no substitutes for it. Think of the power supplier (disregarding that the consumer may use Aeolian/wind or solar energy).
It’s like asking - Product differentiation is the most relevant characteristic for which of these market structures ? Where product differentiation (itself) yields the greatest market power ? In monopoly, market power does not come from differentiation. So the question is properly asked although some may find it ambiguous.
map1 Wrote: ------------------------------------------------------- > A monopolist is going to sell the product anyway, > because there are no substitutes for the product. > There is no need for differentiation, the product > is the only one sold and there are no substitutes > for it. Think of the power supplier (disregarding > that the consumer may use Aeolian/wind or solar > energy). @ dreary: The answer B is just right if you think of a world without price discrimination. @ map1 A monopolist maximizes profit by price discrimination of first order. If you don’t believe me - here an example. x=10-p MC=5 Calculate price,quantity and profit. After that i will prove that price discrimination leads to higher profit.
> It’s like asking - Product differentiation is the > most relevant characteristic for which of these > market structures ? That was not the question.
That’s what I said, maximizes profits by charging different prices for the same product, not by differentiating the product.
@ map There is no substitute, but you can differentiate your product. electricity for private people vs. electricity for enterprises…
cfaisok Wrote: ------------------------------------------------------- > > It’s like asking - Product differentiation is > the > > most relevant characteristic for which of these > > market structures ? > > That was not the question. Of course. I simply paraphrased it. In monopoly and PC - you don’t even have product differentiation for it to be a source of market power. In oligopoly, we have PD but it’s not that relevant when it comes to market power. Monopolistic competition is all about PD.
@map and in the other way: most of the price discriminations are going in line with slightly differentiated products… But anyway. This is nowhere leading and I don’t want to pick on others (That’s what i learned from JoeyD), so I will shut up here.
Some of us should start a lawyer career 
Dreary Wrote: ------------------------------------------------------- > Without product differentiation, a firm in > monopolistic competition goes bankrupt. > Without product differentiation, a firm in a > monoploy doesn’t care. > Answer is B. EXCELLENT. it’s things like this that will help me remember all this on the exam – THANKS. my gut feel was D, too (thiking about Microsofts OS), but when you think about it, if OS was not differentiated, Microsoft would likely NOT lose its monopoly grip. So yes, differentiation in monopolies is a NON event