Explain how firms interact in a monopoly market

The firms in a monopoly market play a dominant role, and thus try to control the market by increasing or decreasing the supply and price of the goods and services. A monopoly is largely a one-way interaction as consumers cannot exert pressure on the firm. However, the elasticity of goods plays a crucial role. If the demand for the good is inelastic, then the monopolist firm can increase the prices of goods and services without any fear of losing customers. On the other hand, if the demand for the good is elastic, then the monopolist cannot increase the prices of goods and services without any fear of losing customers.