A patent gives a firm a monopoly in the production of the ...

[Mimi]

A patent gives a firm a monopoly in the production of the patented good. While monopoly profits provide an incentive for firms to innovate, the monopoly power imposes a cost on consumers. Why do consumers bear a cost from that monopoly? Is the cost to consumers greater than the profits earned by the monopolist?

Question 2

The annual membership fees of the 185 member countries of the IMF are called:
 a. annuities.
  b. quotas.
  c. vetos.
  d. conditionalities.
  e. petrodollars.

[kardosa007]

Answer to Question 1

Consumers bear a cost because monopolists produce less output and charge a higher price than in a competitive industry. There is a resulting loss of consumer surplus. However, only part of this loss is transferred to the monopolist in the form of profit.

Answer to Question 2

b

[Mimi]

Thanks for the timely response, appreciate it

[smrtceo]

Excellent