In a monopoly market, which of the following strategies can a firm employ to maximize its profits through price discrimination while simultaneously creating barriers to entry for potential competitors?

In a monopoly market, a firm can maximize its profits through price discrimination by charging different prices to different customers based on their willingness to pay. This means that the firm identifies groups of consumers who value the product differently and sets prices accordingly, allowing it to capture more consumer surplus. For example, a movie theater might charge lower prices for children and seniors while charging adults a higher ticket price. To create barriers to entry for potential competitors, the monopolist can invest in unique technology, secure exclusive contracts with suppliers, or engage in aggressive marketing to build brand loyalty. These strategies make it difficult for new firms to enter the market and compete effectively, ensuring that the monopolist can maintain its higher profits over time.