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4/07 - suggests government regulation Barrier to entry is...

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4/07/08 Monpoly An industry with one seller; perfect barriers to entry Three different types of monopoly +code words 1) Intellectual property monopoly Monopoly created by the government through patent or copyright? Why? To incent Examples: Microsoft, and Network Solutions Inc. – code words 2) Resource Monopolies One company owns all of something examples: DeBeer’s- code word 3) Natural Monopoly- Any industry characterized by extrodinarily high fixed cost eamples: All public utilities such as, electricity, local phone, sewer, water, natural gas, cable tv,
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Unformatted text preview: suggests government regulation; Barrier to entry is enforced by the government; But natural monopolies are technology dependent. MCI took business from AT&T and invented Cel phones. Remember the god news/bad news proposition about perfect competition? Bad news- stuck with world price Good news- o chance of unsold inventory Well, for a monopoly… Good news- Price Maker not Price Taker Bad news- In order to increase sales, the monopolist must lower his price....
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