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Monica [59]
3 years ago
14

How do monopolies affect the prince of goods ?

History
1 answer:
r-ruslan [8.4K]3 years ago
8 0
We can say that in a monopoly, the price is always higher than the socially optimal price
EXAMPLE: a pharmaceutical company brings out a new medicine for diabetes. It acquires a patent from the government for the production of that medicine implying that only that pharma company has the right to produce the medicine till the patent expires. This leads to a monopoly situation in the market. Now this pharma company can charge the highest price possible so that its profit is maximum since it is the sole producer of that medicine.
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