Chapter 13

To earn economic profits, a monopolist must be protected by a _____ - something that prevents other firms from entering the industry.

Barrier to entry

Gives the creator of a literary or artistic work sole rights to profit from that work.

Copyright

The ability of a firm to raise prices.

Market Power

A firm that is the only producer of a good that has no close substitutes.

Monopolist

An industry controlled by a monopolist.

Monopoly

Exists when increasing returns to scale provide a large cost advantage to a single firm that produces all of an industry's output.

Natural monopoly

Exists when the value of a good or service to an individual is greater when many other people use the good or services as well.

Network externality

Gives an inventor a temporary monopoly in the use or sale of an invention.

Patent

Takes place when a monopolist charges each consumer his or her willingness to pay - the maximum that the consumer is willing to pay.

Perfect price discrimination

Sellers engage in ______ when they charge different prices to different consumers for the same good.

Price discrimination

Limits the price that a monopolist is allowed to charge.

Price regulation

A monopoly, the good is supplied by the government or by a firm owned by the government.

Public ownership

Offers its product to all consumers at the same price.

Single-price monopolist