what determines the level of market power a monopolist can exercise
Market power A firm usually has market power by virtue of controlling a large portion of the market. In extreme cases—monopoly and monopsony—the firm controls the entire market. However, market size alone is not the only indicator of market power. Highly concentrated markets may be contestable if there are no barriers to entry or exit, limiting the incumbent firm's ability to raise its price above competitive levels.
Marginal product of labor During the early stages of production MPL is greater than APL. When the MPL is above the APL the APL will increase. Eventually the MPL reaches it maximum value at the point of diminishing returns. Beyond this point MPL will decrease. However, at the point of diminishing returns the MPL is still above the APL and APL will continue to increase until MPL equals APL. When MPL is below APL, APL will decrease.