ECO 211 HA11

ECO 211 HA11 - 2.2 The federal government grants patents to...

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Microeconomics 211 Chapter 11 : Monopoly and Antitrust Policy HA 11 ( #1.1, 1.2, 2.1, 2.2, 2.3) 1.1) A monopoly is a firm that is the only seller of a good or service that does not have a close substitute. 1.2) Yes. You would have a monopoly if your profits are not competed away in the long run. 2.1) The four main reasons a firm becomes a monopoly are the government blocks entry, control of a key resource, network externalities, and economies of scale.
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Unformatted text preview: 2.2) The federal government grants patents to encourage firms to spend money on research to create new products. 2.3) A public franchise is a firm designated by the government as the only legal provider of a good or service. All public franchises are not natural monopolies and all natural monopolies are not public franchises....
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