This preview shows page 1. Sign up to view the full content.
Unformatted text preview: imited supply of taxicab medallions.
3 ECO 204 Chapter 16: Analysis of Firms with Market Power (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. Pineapples: According to this Wall Street Journal article for a long time Del Monte had a patent on the
world’s bestselling “Gold” pineapple and vigorously fought to protect its pineapple until a Court ruled th at Del
Monte had planted a different pineapple and immediately invited a flood of entrants and resulting in lower
prices. See the article for a juicy (no pun intended) description of how Del Monte patented the Gold pineapple. Drug Dealers: Economists have long argued that drugs should be legalized and its sale regulated (just as
alcohol is sold by the LCBO). Illegalizing drugs restricts supply, raises prices, which incentivizes criminal elements
(i.e. drug dealers). Is it any wonder that drug dealers are protective of their turf and when new “firms” enter the
View Full Document
- Fall '14
- The Land