Why are Monopolies able to profit maximise?

Essentially there are several features of a market structure which determines why monopolies are able to profit maximise.
Very small number of sellers in the given market, In a pure monopoly there is only one seller, however in real life firms with over 25% market share are considered monopolies. some examples are usually very few utility providers- natural monopolyThe product is unique there aren't many alternatives.The firm is a price maker not a price taker, holds the market power over the consumerConsumers may or may not have perfect knowledge.There are barriers to entry, with the example of the natural monopolies you have to build the national grid build power stations, high sunk costs- barriers to exit


Answered by Economics tutor

1794 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

Explain the possible causes of deflation in an economy. (15 Marks)


What is the difference between absolute and comparative advantage?


Evaluate the view that a reduction in UK unemployment is best achieved through the use of supply-side policies.


How would a reduction in interest rates lead to an increase in Economic Growth?


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2026 by IXL Learning