A firm that has a very strong market position and is able to dictate the price that consumers pay for its goods and services. This is normally associated with a firm that possesses monopoly power.
Below is a diagram to show how monopolistic firms can restrict output and charge whatever price they wish to do so to maximise profits. This is not the case in perfectly competitive markets where all firms have to take the market price as given and are price takers as they are all competing over a homogeneous good.
