PRINCIPLES OF MICROECONOMICS (OER)
2nd Edition
ISBN: 9781947172340
Author: Timothy Taylor, Steven A. Greenlaw
Publisher: OpenStax
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Textbook Question
Chapter 9, Problem 28CTQ
Intellectual property laws are intended to promote innovation, but some economists, such as Milton Friedman, have argued that such laws are not desirable. In the United States, there is no intellectual property protection for food recipes or for fashion designs. Considering the state of these two industries, and hearing in mind the discussion of the inefficiency of
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A patent effectively allows a firm to operate as a monopoly while the patent is in effect. Some people argue that the market
power created by patents harms consumers and shouldn't be granted. Others argue that patents are needed to encourage
research and innovation. You can read the article from Forbes to learn more about the history and policy surrounding
patents.
Classify the arguments below as either arguments for patents or arguments against patents.
Arguments For Patents
Arguments Against Patents
Answer Bank
prevents free-riding
encourages higher prices for consumers
prevents competition in the market
research results in a positive externality for society
leads to an ineffient level of production
What are monopolies and oligopolies? How do they tend to differ from businesses in a
market where there is free-market competition? Why do they exhibit such differences?
We have learned the definition of monopoly as a market with one seller. Let's take some time to understand what that means, and how it can come about. What are some of the reasons that a market could be a monopoly? What is giving the monopolist their exclusive position in the market? Everyone should discuss a few reasons and/or examples of how a monopoly can come into existence.
Chapter 9 Solutions
PRINCIPLES OF MICROECONOMICS (OER)
Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Classify the following as a government-enforced...Ch. 9 - Suppose the local electrical utility, a legal...Ch. 9 - If Congress reduced the period of patent...Ch. 9 - Suppose demand for a monopolys product falls 50...Ch. 9 - Imagine a monopolist could charge a different...Ch. 9 - How is monopoly different from perfect...Ch. 9 - What is a barrier to entry? Give some examples.Ch. 9 - What is a natural monopoly?Ch. 9 - What is a legal monopoly?
Ch. 9 - What is predatory pricing?Ch. 9 - How is intellectual property different from other...Ch. 9 - What legal mechanisms protect intellectual...Ch. 9 - In what sense is a natural monopoly natural?Ch. 9 - How is the demand curve perceived by a perfectly...Ch. 9 - How does the demand curve perceived by a...Ch. 9 - Is a monopolist a price taker? Explain briefly.Ch. 9 - What is the usual shape of a total revenue curve...Ch. 9 - What is the usual shape of a marginal revenue cuwe...Ch. 9 - How can a monopolist identify the...Ch. 9 - How can a monopolist identify the...Ch. 9 - When a monopolist identifies its profit-maximizing...Ch. 9 - Is a monopolist allocatively efficient? Why or why...Ch. 9 - How does the quantity produced and price charged...Ch. 9 - ALCOA does not have the monopoly power it once...Ch. 9 - Why are generic pharmaceuticals significantly...Ch. 9 - For many years, the Justice Department has tried...Ch. 9 - Intellectual property laws are intended to promote...Ch. 9 - Imagine that you ale managing a small firm and...Ch. 9 - If a monopoly firm is earning profits, how much...Ch. 9 - Return to Figure 9.2. Suppose P0 is 10 and P1 is...Ch. 9 - Draw the demand curve, marginal revenue, and...Ch. 9 - Draw a monopolists demand curve, marginal revenue,...
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Similar questions
- We have learned the definition of monopoly as a market with one seller. Let's take some time to understand what that means, and how it can come about. What are some of the reasons that a market could be a monopoly? What is giving the monopolist their exclusive position in the market? Everyone should discuss a few reasons and/or examples of how a monopoly can come into existence. Typically the model of Monopoly predicts that all customers are charged the same price and that the monopolist selects the quantity and price combination from the market demand curve that maximizes profit. However, there are times where a monopolist may at least attempt to charge different prices for the exact same product depending on each consumer's willingness and ability to pay. In this case the monopolist might offer the product at a lower price to those who would otherwise not buy it, thus increasing quantity consumed in the market and reducing some of what is called the dead weight loss of monopoly.…arrow_forwardList several reasons that monopolies exist,and explain how each causes barriers to entryarrow_forwardAccording to your book, how does dead weight loss become worse for monopolies than from Perfect competition? What would you suggest to make monopolies have a smaller dead weight loss moving forward? According to your book, what type of Monopolies are actually good for society? Why are they good for society?arrow_forward
- All of the following are examples of monopolies. Most are considered "natural monopolies". Which is a monopoly but not a natural monopoly? (Make sure to know the difference between a monopoly and a natural monopoly) Multiple Choice Electricity companies. Popcorn in a theater Railroad companies Local telephone companiesarrow_forwardWhat is the difference between government granted monopolies and free market monopolies? Which one is more cost efficient and why?arrow_forwardA monopoly, unlike a perfectly competitive firm, has some market power. Thus, it can raise its price, within limits, without quantity demanded falling to zero. The main way monopolies retain their market power is through barriers to entry, which prevent other companies from entering monopolized markets and competing for customers. Consider the market for taxi services. In order to own and operate a taxi, drivers are required to obtain a taxi medallion. Which of the following best explains the barriers to entry that exist in this scenario? Increasing returns to scale Control over an important input O Legal barriersarrow_forward
- What are the causes for monopolies. Discuss the pros and cons of monopolies? What is the deadweight loss in monopoly?arrow_forwardFrom our textbook and in your own words, define what a monopoly is. In your response, address the following: What are some disadvantages and advantages of a monopoly compared to brand competition? Is there a trend toward consolidation in some markets, and if so, what does that mean to you, the consumer? What is better for you, the consumer, monopoly, or brand competition? Please use current research in your response. Here are some ideas that might help you get started. Ninety-two percent of the prescription drugs sold in the United States come from just three wholesalers. Coke owns over 200 brands, including names like Schweppes, Dr. Pepper, Fanta, and Powerade. Nestle owns over 2,000 brands. Hospital consolidation has.arrow_forwardWhy does the government regulate natural monopoliesarrow_forward
- Why are monopolies for the most part illegal?arrow_forwardDoes a monopolist have a supply curve? Explain your answer. What are the different types of price discrimination? Differentiate between an oligopoly and a monopolistic competition (i.e. number of firms and the degree of product differentiation). How are skilled and unskilled workers in an economy likely to be affected if the firms adopt skill-biased technologies?arrow_forwardIn this question, you will discuss the general case of positive externalities in a monopolist’s presence. what is the impact of a monopolist’s presence on a market without positive externalities? Does monopolist hurt the overall social gain (i.e., total surplus or total welfare)? Please explain. Could a monopolist improve the competitive market outcome for a good or a service with positive externalities (and no government intervention to correct it)? Why or why not? Please explain.arrow_forward
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