Monopoly Production and Pricing Decisions and Profit Outcome

Monopolies, as opposed to perfectly competitive markets, have high barriers to entry and a single producer that acts as a price maker.

For monopolies, marginal cost curves are upward sloping and marginal revenues are downward sloping.

Monopolies set marginal cost equal to marginal revenue in order to maximize profit.

To maximize output, monopolies produce the quantity at which marginal supply is equal to marginal cost.

Monopolies can influence a good's price by changing output levels, which allows them to make an economic profit.