ABSTRACT
Monopoly profits in a given market may arise in part because the suppliers are providing something buyers need and can get nowhere else. In this case, monopolists and oligopolists have power over buyers. How much power depends on whether any close substitutes exist for what the monopolist sells, and on whether the monopoly's customers will face significant baITiers or costs in switching markets. These baITiers could arise because of discrimination, but they might also be due to transaction costs or informational baITiers. In sum, the more nearly unique the product and the fewer options the monopoly's customers have, the higher monopoly profits can be in a given market.
