Chapter 10

Question 1

Copyright

Answer 1

A grant of exclusive rights to sell a literary, musical, or artistic work

Question 2

Government Franchise

Answer 2

A government granted right to be the sole seller of a product or service

Question 3

Market Power

Answer 3

The ability of a seller to raise price without losing all demand for the product being sold

Question 4

Monopoly

Answer 4

The only seller in a market, or a market with just one seller

Question 5

Natural Monopoly

Answer 5

A monopoly that arises when, due to economies of scale, a single firm can produce for the entire market at a lower cost per unit than could two or more firms

Question 6

Network externalities

Answer 6

Additional benefits enjoyed by all users of a good or service because others use it as well

Question 7

Patent

Answer 7

A temporary grant of monopoly rights over a new product or scientific discovery

Question 8

Perfect Price Discrimination

Answer 8

Charging each customer the most he or she would be willing to pay for each unit purchased

Question 9

Price discrimination

Answer 9

Charging different prices to different customers for reasons other than differences in cost

Question 10

Price setter

Answer 10

A firm (with market power) that selects its price, rather than accepting the market price as a given

Question 11

Rent-Seeking Activity

Answer 11

Any costly action a firm undertakes to establish or maintain its monopoly status

Question 12

Single-Price Monopoly

Answer 12

A monopoly firm that is limited to charging the same price for each unit of output sold