Find out everything you need to know about it here. Beside this, does the monopolist always charge a single price for his product?
In theory, a monopolist can set any price it wants. Absent the pressure to push prices down due to competition, the sole supplier of a good or service is free to charge its customers whatever amount it chooses. This, though, is theory.
Also Know, can a monopolist charge any price? For a monopoly, price need not equal marginal cost. However, monopolies cannot charge any price they want. If Microsoft charged too high a price for Windows, fewer people would buy it. Profits of monopolies are not unlimited, though they can be higher than profits for competitive firms.
Also know, how does a monopolist determine price?
Monopoly Production Point When a monopolist produces the quantity determined by the intersection of MR and MC, it can charge the price determined by the market demand curve at the quantity. Therefore, monopolists produce less but charge more than a firm in a competitive market.
How does a single price monopoly maximize profit?
A monopolist can determine its profit-maximizing price and quantity by analyzing the marginal revenue and marginal costs of producing an extra unit. Thus, a profit-maximizing monopoly should follow the rule of producing up to the quantity where marginal revenue is equal to marginal cost—that is, MR = MC.
