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Monopoly price
A
monopoly price
is set by a
monopoly
. A
monopoly
occurs when a firm is the only firm in an industry producing the product, such that the
monopoly
faces no competition. A
monopoly
has absolute
market power
, and thereby can set a
monopoly price
that will be above the firm's
marginal (economic) cost
, which is the change in
total (economic) cost
due to one additional unit produced.
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