Monopolies arise for key reasons such as owning a scarce resource, government protections, or having significantly lower costs of production than competitors. Monopolies make pricing decisions to maximize profits by setting price where marginal revenue equals marginal costs, which is above the efficient quantity and results in deadweight loss. Various public policies aim to increase competition in monopolized markets, such as antitrust laws, regulation, public ownership, or doing nothing and allowing price discrimination.

1. By Andrew Liu and Mason Liang