Monopolists are able to set the price for their good. nevertheless, monopolists face a tradeoff in raising price because a higher price, means lower sales.
A monopoly is a market arrangement where one producer or seller holds a disproportionate amount of power within a certain market. Monopolies are forbidden in free-market economies as they limit customer alternatives and impede competition.
Monopoly power is another name for market power. A "price taker" business is one that competes. As a result, a firm in a market with competition cannot alter the price of a good. Due to the modest size of any competing firm in relation to the market, they have no impact on pricing. Firms with market power, on the other hand, are also referred to as "price makers."
Monopolies frequently benefit from economies of scale, the capacity to produce large volumes at reduced unit prices. Monopolists can indeed increase their prices as they want, but they will have to face the tradeoff of lower sales.
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