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Ordinary Monopolist

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PPGPortal > Home > Concept Dictionary > N, O > Ordinary Monopolist
 

Ordinary Monopolist  

A monopolist who must sell all the goods that he supplies at the same price. The ordinary monopolist will set his prices at whatever level will lead to the highest revenues.

(Dwayne Benjamin, Toronto PPG 1002H)

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The ordinary monopolist, unlike a discriminating monopolist, must charge all of his consumers the same price for his product. Because the monopolist determines the entire market supply of his good, he is effectively able to set the price of that good. The ordinary monopolist will choose the quantity and price that maximizes his total revenue.

Consider the example of a monopolist landlord who is trying to decide the price at which he will rent his apartments. If he sets the price too low, he will rent a large number of units but revenue per unit will be low. At a high price, the monopolist will enjoy a high level of revenue per unit, but he will not be able to rent out very many apartments. There will always be a price that is "just right" at which the monopolist maximizes his revenue.

     

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