{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Principles of Economics- Mankiw (5th) 308

Principles of Economics- Mankiw (5th) 308 - 318 PA R T F I...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
318 PART FIVE FIRM BEHAVIOR AND THE ORGANIZATION OF INDUSTRY successful, consumers will view diamonds as unique, rather than as one among many gemstones, and this perception will give DeBeers greater market power. GOVERNMENT-CREATED MONOPOLIES In many cases, monopolies arise because the government has given one person or firm the exclusive right to sell some good or service. Sometimes the monopoly arises 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 other times, the government grants a monopoly because doing so is viewed to be in the public 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
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}