Monopolies May Be Created When One Firm Owns an Input

question 68

Multiple Choice

Monopolies may be created when one firm owns an input that is difficult to duplicate and the:

• A) demand for the product is elastic.
• B) demand for the product is inelastic.
• C) supply of the product is elastic.
• D) supply of the product is inelastic.

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Definitions:

Industry Curve

Refers to the graphical representation of the supply and demand equilibrium of an entire industry.

Coase Theorem

A principle in economics that suggests that if there are no transaction costs, parties can bargain privately to resolve conflicts of interest over resource allocation, leading to an efficient outcome.

Clog Dancing

A traditional type of folk dance where dancers wear shoes with wooden soles to produce percussive sounds.

Free-Rider Problem

The free-rider problem occurs when individuals consume a good without paying for it or underpay, benefiting from others' contribution, typically seen in the provision of public goods.