Certified Management Accountant Practice Exam 2025 - Free CMA Practice Questions and Study Guide

A monopoly is characterized primarily by the presence of a single firm that dominates the market for a unique product or service. This unique offering, which has no close substitutes, empowers that firm with significant control over prices. The firm can set prices higher without the fear of losing customers to competitors, as there are no alternatives available.

The control of a unique product is what differentiates a monopoly from other market structures. In scenarios where multiple firms offer similar products, or where there is easy entry and exit for firms in the market, such conditions would not align with the defining features of a monopoly. Additionally, the competition primarily through marketing signifies an environment where multiple firms exist and vie for market share, which is contrary to the monopolistic situation where one firm has total market control. Hence, the distinctive control of both product uniqueness and pricing power is what solidifies option B as the correct choice in defining a monopoly.