monopolist is to choose the combination of price and quantity that maximizes profits.

CLEAR IT UP

What defines the market?
A monopoly is a firm that sells all or nearly all of the goods and services in a given market. However, what defines

the “market”?

In a famous 1947 case, the federal government accused the DuPont company of having a monopoly in the

cellophane market, pointing out that DuPont produced 75% of the cellophane in the United States. DuPont

countered that even though it had a 75% market share in cellophane, it had less than a 20% share of the “flexible

packaging materials,” which includes all other moisture-proof papers, films, and foils. In 1956, after years of legal

appeals, the U.S. Supreme Court held that the broader market definition was more appropriate, and it dismissed the

case against DuPont.
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