Monopoly profit

Introducing new Competition in what was previously a monopoly removes monopoly profit.

Only 2 Firms are shown here to make Illustration of the additional Competition easier in a Graphical Presentation. In Normal Circumstances, it takes more than 2 firms to form a Competitive Situation, and having only 2 firms forms a

Government regulations of the Price the Monopoly can charge reduces the Monopoly Profit, but does not eliminate it.

In economics a monopoly is a firm that lacks any viable competition, and is the sole producer of the industry's product. In a normal competitive situation, no firm can charge a price that is significantly higher than the Marginal (Economic) cost of producing (the last unit of) the product. If any firm doing business within a competitive situation tries to raise prices significantly higher than the Marginal cost of producing the product, it will lose all of its customers to either other existing firms that charge lower prices, or to a new firm that will find it profitable to use a lower price (closer to its marginal cost) to take customers away from the firm charging the higher price. But since the monopoly firm does not have to worry about losing customers to competitors, it can set a Monopoly price that is significantly higher than its marginal cost, allowing it to have an economic profit that is significantly higher than the normal profit that is typically found in a perfectly competitive industry. The high economic profit obtained by a monopoly firm is referred to as monopoly profit.

单词	Monopoly profit
释义	Monopoly profit 原声例句经济学人（汇总） They might still be innovative-with monopoly profits up for grabs, why not be? -but market power usually makes economies less productive overall. 他们仍可以是有创造力的—垄断利润大家都有份，为什么不呢？—但是市场支配力通常会让经济整体生产力更低。英语百科 Monopoly profit In economics a monopoly is a firm that lacks any viable competition, and is the sole producer of the industry's product. In a normal competitive situation, no firm can charge a price that is significantly higher than the Marginal (Economic) cost of producing (the last unit of) the product. If any firm doing business within a competitive situation tries to raise prices significantly higher than the Marginal cost of producing the product, it will lose all of its customers to either other existing firms that charge lower prices, or to a new firm that will find it profitable to use a lower price (closer to its marginal cost) to take customers away from the firm charging the higher price. But since the monopoly firm does not have to worry about losing customers to competitors, it can set a Monopoly price that is significantly higher than its marginal cost, allowing it to have an economic profit that is significantly higher than the normal profit that is typically found in a perfectly competitive industry. The high economic profit obtained by a monopoly firm is referred to as monopoly profit.
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