What does the term 'monopoly price' refer to?

The term 'monopoly price' specifically refers to the price at which a monopoly sells its goods. A monopoly occurs when a single firm is the sole supplier of a product or service in a market, leading to a lack of competition. Unlike in competitive markets where prices are driven down to the equilibrium point due to competition, a monopoly has the power to set prices higher than marginal costs to maximize profits.

The monopoly price is determined by the demand for the product; typically, the monopolist will analyze the demand curve to find the price that maximizes profits while taking into account the quantity that will be sold at that price. This often results in a price that is higher than what would be found in a competitive market, where prices tend to stabilize at the intersection of supply and demand.

In summary, the monopoly price is not influenced by competing sellers; instead, it reflects the monopolist's control over the market, allowing them to charge a price that maximizes their profits rather than a price that reflects competitive market dynamics.