Can a monopoly charge any price it wants? Why or why not?

Answer 1

Yes (that's the one definition of a Monopoly)

Of course in the real world, the answer is 'it depends' on factors such as how much can the Customers afford ? what other items could be substituted ? how vital is the product (can Customers do without it ?)

Say I have a Monopoly on the supply of water ..

In theory I could charge you £1,000 a pint - however at this price most Customers would stop buying water and start drinking beer instead :-)

Answer 2

A monopoly can't fee ANY value - in undemanding words the utmost value a shopper is keen to pay. in case you fee $2 hundred for some thing for which i'm in undemanding words keen to pay $20, i visit't purchase what you want to promote. the position a monopoly can have interaction in value discrimination, it may receive added salary by ability of charging the utmost each human being shopper is keen to pay; if i'm keen to pay $20 and also you $30, then the monopoly will carry at the same time $50 and also you and that i visit have our products; in spite of the undeniable fact that, a perfectly aggressive agency ought to value its sturdy at $20 or decrease than in order to achieve both sales.

Answer 3

yes and no! yes since they have no competition and no since if they get too costly who will buy there product or services. You can always do with out you know.