I need an explanation for this Economics question to help me study.
It is generally assumed that “a monopolist can always make a profit because with no competition it can charge any price it likes.” Do you think this statement is true?
Suppose your family owns the only movie theater in your home town, and there is no other movie theater within 40 miles of your town. It happens that your uncle is the town’s zoning board chairperson, you feel confident that no competitors will be allowed into the market. What factors might limit your ability to “charge any price you like, and still make a profit?”