318PART FIVEFIRM BEHAVIOR AND THE ORGANIZATION OF INDUSTRYsuccessful, consumers will view diamonds as unique, rather than as one amongmany gemstones, and this perception will give DeBeers greater market power.GOVERNMENT-CREATED MONOPOLIESIn many cases, monopolies arise because the government has given one person orfirm the exclusive right to sell some good or service. Sometimes the monopolyarises from the sheer political clout of the would-be monopolist. Kings, for exam-ple, once granted exclusive business licenses to their friends and allies. At othertimes, the government grants a monopoly because doing so is viewed to be in thepublic interest. For instance, the U.S. government has given a monopoly to a com-pany called Network Solutions, Inc., which maintains the database of all .com,.net, and .org Internet addresses, on the grounds that such data need to be central-ized and comprehensive.The patent and copyright laws are two important examples of how the gov-ernment creates a monopoly to serve the public interest. When a pharmaceutical
This is the end of the preview.
access the rest of the document.