A Monopolist Has the Power to Set Price, but Is

question 32

Essay

A monopolist has the power to set price, but is not entirely free to set the price of its product. Explain.

---

Definitions:

Market Supply

The total amount of a specific good or service that is available to consumers in a market at current prices.

Increasing-cost Industry

An increasing-cost industry is one in which the entry of new firms raises the average costs of production, often due to limited resources or increasing prices for inputs.

Consumer Demand

The willingness and ability of consumers to purchase goods and services at different prices, influencing market dynamics and prices.

Market Price

The price of a good or service determined by supply and demand in a competitive market.