From: foolm0ron | #081
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.
And the follow-up point is that the further the monopoly price departs from the market price, the more likely it is that competitors will see an opportunity to make a profit and enter the market.
As far as undercutting goes, that's where the total wealth comes into play. If the Pope is just as wealthy as the Venetians, undercutting won't drive him out of the market, because he can afford to take the loss just as much as they can.
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