Markets and competition
How many sellers there are on a market helps decide the price. With lots of competition the price falls towards the costs, with one seller it does not.
Why
Why does a portion of chips often cost less in a town with ten chip shops than at the only snack bar on a festival site?
At the festival you cannot go anywhere else. In town you simply walk to the next chip shop if you do not like the price.
How many sellers there are and how hard they fight for customers is called the market form. If you know it, you understand why some prices stay high and why the government watches over fair competition.
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