Monopoly profit

Monopoly profits
Definition: Supernormal profits earned by monopoly producers. They can also be called abnormal profits.
Related glossary term: ...

MONOPOLY PROFIT: Economic profit generated as a result of a firm's market control. It's termed monopoly profit as a reflection of the most prominent market structure with market control--monopoly.

Although some monopoly profits exist in any economy, they are a very small portion of total profits in any rich society. In rich societies, most consumption consists of either luxuries or products that have close substitutes.

The use of aggressive (i.e., low) pricing to put a competitor out of business, with the intent, once they are gone, of raising prices to gain monopoly profits.
Predatory dumping ...

The intended purpose of a cartel is to reap monopoly profits by artificially restricting output and thus driving the price above the level that would prevail if they remained in competition with one another.

A reason given in support of patents is that they provide an economic incentive for the creation of new and useful inventions by temporarily rewarding the inventor with monopoly profits.

Cost-of-service regulation Regulation based on allowing prices to reflect only the actual cost of production and no monopoly profits.
Cost-push inflation Inflation caused a by continually decreasing short-run aggregate supply curve.

Horizontal mergers are regulated by the government for possible negative effects on competition. They decrease the number of firms in an industry, possibly making it easier for the industry members to go into cartels for monopoly profits. ...

Some states considered following the advice of the reformer Henry George and replacing the property tax with a "single tax" on the monopoly profits embedded in the price of land. Farm lobbies, however, invariably blocked such initiatives.

often become lazy, successful innovation may come from new entrants to a market, who take it away from the incumbent, thus blowing 'gales of creative destruction' through the economy. Eventually, the new entrants grow fat on their monopoly profits, ...

See also: Monopoly, Cartel, Concentration, Monopolies, Economies of scale