The "Sonny Bono" Copyright Term Extension Act extended the copyright terms in the U.S. by 20 years. In addition, the act was applied to already existing copyrights

a. Discuss the advantages and/or disadvantages in terms of efficiency and monopoly power from the extension of the lifespan of new copyrights. In theory, what determines the optimal term of a copyright?
b. Discuss the advantages and/or disadvantages in terms of efficiency and monopoly power from the extension of the lifespan of existing copyrights.


a. There are a number of issues students may bring up, but of importance is to recognize the tradeoff between the development of new ideas and the continuation of monopoly deadweight losses. By extending the copyright terms, artists/inventors have more incentive to develop new ideas as the monopoly profit from doing so will increase. On the other hand, extending the length does add to the deadweight loss from the monopoly. The optimal term length should equate the marginal benefits from the incentive to develop new ideas and the marginal cost of the added DWL generated from longer terms.
b. There is no efficiency gain, only added DWL. Because these copyrights are in place already for previously developed ideas, there is no benefit in terms of increasing quantity of ideas/invention. The only change is the added DWL.

Economics

You might also like to view...

When an employer provides in-kind benefits to employees, the In-kind benefits are _____

a. never taxed as income b. sometimes taxed as income c. always taxed as income d. always taxed as consumption

Economics

Which one of the following will shift the Israeli consumption curve upward?

a. higher interest rates in Israel b. an increase in real assets in Israel c. expectations of future Israeli economic growth d. lower capacity utilization rates in Israel e. a tax increase in Israel

Economics

Which of the following scenarios illustrates the theory of rational expectations? a. Kyle decides to buy a plot of land near the new industrial hub of his city

b. Sheila decides to take up a job in a shoe store rather than studying further. c. Dean decides to look for new jobs when the economy is in recession. d. Kevin determines that the average miles per gallon on his last three car trips is 37.

Economics

Which of the following is an example of a worker experiencing cyclical unemployment?

A) a worker who changes jobs to move closer to her family B) an assembly line worker who loses his job because of automation C) a freightliner employee that got laid off because of the recession of 2007-2009 D) a lifeguard who was hired during the summer season is laid off after summer is over

Economics