I have a document library having documents (eg: word,pdf etc). User has add and edit permission to the library (required) But user should be able to edit a particular document. Can I set the permission as read only for documents for users with edit permission on a library?

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Yes. You can set Item level permissions on Document Library. Click the context menu/List Item Menu and click Permissions. Here you can Stop Inheriting Permissions from Library and set unique permissions for the Document.

List Item - Manage Permissions

And once you stop the inheritance of the Document, it will say Item has unique permissions, see below:

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