Suppose the government has granted patents to three firms that make the only versions of a particular type of product. What will result?
a. The small number of competitors will attract new firms to the market.
b. Monopolistic competition will drive at least one firm to exit the market.
c. The three firms will constitute an oligopoly.
d. The three firms will have a legal monopoly rather than a natural monopoly.
c. The three firms will constitute an oligopoly.
When the government grants patents to, for example, three different pharmaceutical companies that each has its own drug for reducing high blood pressure, those three firms may become an oligopoly.
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Fill in the blank: ________ leads to speculation
A) Love B) Uncertainty C) Greed D) Money E) Sin
You decide that it is time to buy a big family car. The opportunity cost you consider is:
a. the cost of the car. b. the increase in comfort for your family while traveling. c. the return this money would have earned if it was invested otherwise. d. the inconvenience you and your family are bearing on account of your old car.
Suppose you owned a kiosk where you sold T-shirts to other students and that after conducting a quicksurbey you find that at the current price the price elasticity of demand for your T-shirts is inelastic. Knowing this, if you wanted to increase the total revenue from selling T-shirts you should:
a. increase the price b. decrease the price c. leave the price where it is d. give away T-shirts e. none of the above
The main policy tool for manipulating consumer spending is personal income tax, but this tool takes time to have an effect.
Answer the following statement true (T) or false (F)