Refer to the above table. Refer to the above graph. The firm produces a good or a service for which there are no close substitutes. The firm has considerable control over the quantity of the output produced, but not over price. Exit from the industry is blocked but entry into the industry is relatively easy.
Many people believe that monopolies charge any price they want to without affecting sales.
Successful price discrimination will provide the firm with higher total revenue than if it did not discriminate. Price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly. It exists when price differences depend critically on differences in the costs of production of serving different groups of buyers. Refer to the above table. The percentage change in the real wage minus the percentage change in the price level equals the percentage change in the nominal wage.