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Monopolistic Pricing Strategies


Discuss whether or not a monopoly will charge high prices.


Market Structures and Competition

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I. 🍃Introduction
- Definition of monopoly
- Importance of understanding why it might or might not be beneficial

II. Reasons why a monopoly might be beneficial
- High market power and ability to be a price maker
- Inelastic demand for its product due to lack of substitutes
- Ability to raise revenue by raising prices
- Maximizing profit

III. Reasons why a monopoly might not be beneficial
- Lack of competition resulting in higher costs and prices
- Low average cost of production due to economies of scale
- Not always a profit maximizer
- Product with elastic demand
- Fear of new firms entering the market and reducing market power
- Fear of government intervention

IV. 👉Conclusion
- Summary of reasons why a monopoly might or might not be beneficial
- Importance of considering both sides when analyzing a monopoly's impact on the market.

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