ECON 1050 Chapter Notes - Chapter 13: Economic Rent, Economic Surplus, Social Cost

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Econ chapter 13 notes and terms monopoly. A monopoly is a market with a single firm that produces a good or service with no close substitutes and that is protected by a barrier that prevents other firms from entering the market. Monopolies arise for two reasons: there are no close substitutes, and there is a barrier to entry. Public franchise: an exclusive right granted to a firm to supply a good or service (canada post). Government license: controls entry into particular occupations, professions and industries. Licensing: does not always create a monopoly, but it does restrict competition. Patent: an exclusive right granted to the inventor of a product or service. Copyright: an exclusive right granted to the author or composer or artistic work. *patents and copyrights are valid for a limited time period. Patents encourage the invention of new products and production methods, and they also stimulate innovation. Monopolies set their own prices using two price strategies:

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