Conrad has a passion for paper. Everything made of paper, not the least books. And so, he’s started his own publishing house, Alpha Books. The first thing he does as a publisher is to launch a book on microeconomics, a simple introductory textbook written by Anna and Brian’s lecturer at the School of Economics, and he simply refers to it as “the ABC.” Alpha Books is the only publisher with the rights to produce this book: Alpha Books has a monopoly on the ABC. What price should the monopolist set for the microeconomics textbook? How strong is Alpha Books’ market power, really? And if the monopolist can price discriminate between different customer groups, which prices should it set? Finally, why is monopoly considered problematic from a societal perspective, and can monopolies sometimes be beneficial? We will answer all of this in this chapter! We start by introducing the key concept of marginal revenue and then derive the monopolist’s optimal choice of quantity. Even though the monopolist is the only producer of this product, there may be substitutes, which limit how high the monopolist can set the price: the price elasticity of demand indicates how strong the monopolist’s market power is. We then move on to the question of price discrimination before studying the societal implications of monopoly, both regarding efficiency and distribution. Finally, we address the case of natural monopolies—situations where monopoly can be justified from an economic-efficiency perspective.