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Monopoly

2. The Nature of Monopoly

2.2. Answers to Try It! Problems

  1. The government's grant of an exclusive franchise to the drug gave the firm monopoly power.
  2. While John and Mary have the only shop in town, this is an easy entry business. Further, there may be competitors in the nearby town. John and Mary probably have monopoly power, but they do not have a monopoly.
  3. Natural monopoly.
  4. Patent with strong network effects.