Principles of Economics- Mankiw (5th) 308

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

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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-
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This note was uploaded on 07/30/2010 for the course ECON 120 taught by Professor Abijian during the Spring '10 term at Mesa CC.

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