A pure monopolist is a company that has no competition in the market. This means that they have full control over how much to produce and what price to charge for their product. A pure monopolist will maximize profits by producing that output at which marginal cost equals marginal revenue; this is where the demand curve intersects with the supply curve, and it’s also known as profit-maximizing equilibrium or profit maximizing output.
Below are some of our favorite examples of pure monopoly industries: Movies – The only movie theater in town limits your ability to go elsewhere if you want an evening out on the town. Water – In many places around the world water comes from one source, so even though there may be other options, there’s no incentive to switch.
Drugs – It can be hard for a person who needs drugs regularly and cannot afford them, or has difficulty getting the prescriptions they need, to find an alternative supplier of their needed medication.
Search Engines – The only search engine you use limits your ability to compare options before making a decision. Since monopolies are unregulated by government restrictions on how much it is allowed produce and charge for its goods and services, pure monopolies have little problem with charging high prices because customers have few other choices in terms of where they get what they want or need from companies that provide similar products or services.