Economics - Monopoly pricing Would a monopolist who is able to charge varying prices in different markets charge more for the same product in a market where demand is greater?

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A company with a monopoly is going to charge as much as it can get away with as long as the product is not a luxury good.  If it is a luxury good, and people don't need it, the people might just stop buying the good altogether even if there...

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A company with a monopoly is going to charge as much as it can get away with as long as the product is not a luxury good.  If it is a luxury good, and people don't need it, the people might just stop buying the good altogether even if there is only one company making it.

A monopoly is a market condition in which a single seller controls the entire output of a particular good or service. (enotes)

If purple panda bear boots are very popular, and only one company makes them, then the company can charge whatever it wants.  However, if the price gets too high people won't buy them, because they don't NEED them.

The window of time one can have a monopoly is pretty small for a luxury good unless you really have strong brand name recognition.  Otherwise, someone is going to copy you!

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I’m wondering if there is some reason why you are thinking the monopolist would not charge higher prices in a market where demand is greater.

This appears to me to be very straightforward.  In a market where there is greater demand, the price at the monopolist’s profit maximization point (the quantity where marginal cost equals marginal revenue) will be higher than in a market where the demand is lower.  Therefore the monopolist will charge a higher price.

The only reason I can see not to do this is if these markets actually overlap a bit.  In such a case, people in one market could buy it cheap and resell it in the other market.  If the markets really are separate, it seems like a simple choice for the monopolist.

What do you think?

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