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A monopoly is characterized by a single firm dominating the market with significant control over price and output, facing a downward-sloping demand curve. The monopolist maximizes profit by producing where marginal revenue equals marginal cost, setting prices above marginal cost, and sustaining economic profits due to barriers to entry. This results in deadweight loss and allocative inefficiency as output is restricted compared to a perfectly competitive market.
- Author
- priyankaprakash
- Language
- EN