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