(a) A pure monopoly may exist under conditions where there is a single seller of a product with no close substitutes, often due to barriers like legal patents, control over essential resources, or government regulations preventing entry.

(b) Four characteristics of a pure monopoly are:

• Single seller with no competitors.
• Price maker, as the firm controls the market supply.
• High barriers to entry for new firms.
• No close substitutes for the product.

(c) Two limits of monopoly power are:

• Potential government regulation or antitrust laws to prevent abuse.
• Threat of substitutes emerging over time due to technological changes.

(d) The monopolist determines his normal profit by producing at the output level where marginal cost (MC) equals marginal revenue (MR), and if average revenue (AR) covers average total cost (ATC) at that point, earning just enough to cover opportunity costs without supernormal profits.

(e) Postal service is typically a legal or government monopoly, where the state grants exclusive rights to provide the service, as seen with Ghana Post in Ghana.

In banking, monopolies are rare due to BoG’s promotion of competition under Act 930, but historical examples like pre-cleanup dominance by a few banks highlighted limits via regulatory interventions for market fairness.