In the context of Gary's Gym holding a patent on a unique exercise device, what is the primary reason for setting a price above marginal cost?

When Gary's Gym holds a patent on a unique exercise device, it means they have exclusive rights to sell that device, giving them a monopoly in that market. Setting a price above marginal cost allows the gym to maximize its profits because they can charge more than what it costs to produce each additional unit. For example, if it costs $50 to make one exercise device but they sell it for $100, the extra $50 contributes to their profit. This pricing strategy is important because it helps cover fixed costs and rewards the company for its innovation, while also reflecting the high demand for their unique product. By maintaining a higher price, Gary's Gym can secure a steady revenue stream and invest in further improvements or new products.