Gary's Gym has a unique exercise device that allows it to set prices higher than the marginal cost. If the gym decides to lower its price to increase the quantity demanded, which category best describes the gym's pricing strategy and its implications for market power?

When Gary's Gym sets prices higher than the marginal cost, it is acting like a monopoly, which means it has significant control over its pricing. If the gym decides to lower its price to attract more customers, it is likely trying to increase demand for its unique exercise device. This strategy can help the gym maximize profits by selling more units, even if the price is lower. For example, if the gym lowers the price from $100 to $80, more people might join, leading to higher overall revenue despite the lower price per person. This shows how the gym uses its market power to influence customer behavior and improve its financial situation.