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Monopoly Power

by Jadrian

Gus is set on controlling the market for meth in the Southwest. He's worked hard to eliminate the local drug cartel so that he can be the sole supplier. Being the only supplier of a product gives a firm market power to charge prices greater than marginal cost. While profit maximization still occurs where marginal cost equals marginal revenue, a firm with market power can select a price higher, based on the demand for the product. As the number of substitutes (competitors) decreases, the demand for each firm becomes steeper, allowing the firm to charger higher prices.

Breaking Bad: Controlling the Market

Gus incites a fight in order to pick up market share

from Breaking Bad (2010)
Creator: Vince Gilligan
Distributor: AMC
Posted by Jadrian