8 (a) The cost of buying a new head office for a firm that sells oranges in aperfectly competitive market has increased by 2%. What will happento the price of oranges and the profit maximising quantity of orangesas a result, and why?(b)Why might governments allow the creation of monopolies via patentprotection, despite the other negative effects of monopolies? Providea brief answer of up to a maximum of 100 words.

of buying a new head office for a firm that sells ora competitive market has increased by 2%. What will ce of oranges and the profit maximising quantity of t, and why? at governments allow the creation of monopolies vi n, despite the other negative effects of monopolies Iswer of up to a maximum of 100 words.

of buying a new head office for a firm that sells ora competitive market has increased by 2%. What will ce of oranges and the profit maximising quantity of t, and why? at governments allow the creation of monopolies vi n, despite the other negative effects of monopolies Iswer of up to a maximum of 100 words.

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter13: Between Competition And Monopoly

Section: Chapter Questions

Problem 9DQ

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Similar questions

Suppose the market for Hula Hoops is monopolized by a single firm. a. Draw the initial equilibrium for such a market. b. Now suppose the demand for Hula Hoops shifts outward slightly. Show that, in general (contrary to the competitive case), it will not be possible to predict the effect of this shift in demand on the market price of Hula Hoops. c. Consider three possible ways in which the price elasticity of demand might change as the demand curve shifts: It might increase, it might decrease, or it might stay the same. Consider also that marginal costs for the monopolist might be increasing, decreasing, or constant in the range where MR=MC Consequently, there are nine different combinations of types of demand shifts and marginal cost slope configurations. Analyze each of these to determine for which it is possible to make a definite prediction about the effect of the shift in demand on the price of Hula Hoops.
Classify the following as a government-enforced barrier to entry, a banker to entry that is not government-enforced, or a situation that does not involve a barrier to entry. A patented invention A popular but easily copied restaurant recipe An industry where economies of scale are very small compared to the size of demand in the market A well-established reputation for slashing prices in response to new entry A well-respected brand name that has been carefully built up over many years
What might some of the negatives of deregulation be?
Intellectual property laws are intended to promote innovation, but some economists, such as Milton Friedman, have argued that such laws are not desirable. In the United States, there is no intellectual property protection for food recipes or for fashion designs. Considering the state of these two industries, and hearing in mind the discussion of the inefficiency of monopolies, can you think of any reasons why intellectual property laws might hinder innovation in some cases?