The I’m not crazy I prefer the term mentally hilarious shirt idea that a monopoly will only cause a one time increase in price and not continuing inflation is a microeconomic concept that assumes a constant demand and cost of production. With excess inflation nominal demand and cost continue to increase. This is because the second ingredient in excess inflation is unemployment getting so low that it causes an increase in worker’s bargaining power. With unemployment getting low, workers can demand wage increases. This increases costs and cuts into the employer’s excess profits, also known as economic rents. To the extent that the employer has monopoly power, they will raise prices in response to the wage increases, in order to preserve those excess profits. Then, if unemployment remains low, workers, when they see the buying power of their higher wages decrease, will be in a position to demand even higher wages,
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The I’m not crazy I prefer the term mentally hilarious shirt employers will again compensate by raising prices, etc., causing prices to spiral upwards. And it would not be an absolute thing either. Workers’ bargaining power differs depending on other factors too, so the level of unemployment that gives workers bargaining power, and how much bargaining power it gives them, varies. And the confidence that employers have in raising prices depends on how much monopoly power they have. Just like with workers’ bargaining power, monopoly power is a matter of degree.