Sample Essay

A monopolist can set price to maximize profits by charging premium prices for the products and services provided. As a monopolistic market is not based on the perfect competition as indicated by the equilibrium of supply and demand, the firm in monopoly like the Microsoft Corporation which is the sole provider of products and services with the largest market share can dictate their own prices for the products which the consumers end up buying due to no alternatives.

This enables the monopolist to set price which maximize their own profits. However it needs to be considered that in a monopoly, the firm is often concerned with the high profitability and performance of the company instead of the welfare of the people. In a competitive market the people get welfare as they have alternatives to choose from providing products and services at low competitive prices. On the other hand in a monopolistic market the people are not provided with a choice and end up paying much more for products and services which may not be of their choice or suite their specific needs. The monopolistic firm maximizes profits by setting an output level where the marginal revenue is equal to the marginal cost and selling at this price.

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Essay: Monopolist power enjoyed by Microsoft
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