From: red sox 777 | #080
Monopolies don't price gouge per se. The optimal price for a monopolist is higher than in a competitive market, but it's not always astronomical. The reason is that fewer people will buy the product as the price goes up, monopoly or no, and the monopolist wants to set his price to maximize profit.
Well it depends on how much demand there is for the item. The point is that a monopoly's price increases far more rapidly with demand than an good that has competition in the market.
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