In a monopoly like Gary's Gym, what is the primary reason that price can exceed marginal cost without losing customers?

In a monopoly like Gary's Gym, the primary reason that price can exceed marginal cost without losing customers is that there are no close substitutes for the gym's services. This means that customers have limited options, so they are willing to pay a higher price for the unique services Gary offers. Since Gary's Gym is the only provider in the area, he can set prices above the marginal cost, which is the cost of providing one more unit of service, without worrying about losing customers to competitors. For example, if Gary offers specialized fitness classes that can't be found anywhere else, members may gladly pay more because they value those classes. Therefore, the lack of competition allows Gary to maximize his profits by charging higher prices.