Firms in a monopoly are characterized by having what level of market power?

In a monopoly, a firm is the sole provider of a good or service, which grants it complete control over the market. This means that the firm can set prices without competition, effectively dictating the terms of sale and availability of the product. With no competitors to challenge its pricing strategy, the monopolist can maximize profit by restricting output and raising prices beyond what would be possible in a competitive market.

This complete market power leads to a unique set of dynamics where the monopolist is the market maker, able to influence demand and supply curves, and thus shape market conditions according to its interests. Because of this position, the monopolist can maintain higher profits over the long term than firms in competitive markets, where price and output are determined by the forces of supply and demand.