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Evaluate the statement: A monopolist is a price-maker because this firm can charge whatever price it desires. What market conditions may challenge this statement?

User Stuples
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Answer:

Eventually no matter how much consumer needs a certain good or service, if a monopolist charges too much for it, the demand will start to fall, e.g. if Microsoft would start charging $2,000 for Windows licenses, eventually consumers would ditch Windows and switch to other operating systems.

Even if a monopolist is able to perfectly price discriminate, at some point consumers will no longer be able or willing to pay. No matter how much bargaining power a monopolist holds, consumers' income will always limit the maximum price.

User Will Iverson
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