The duration of monopoly positions consider the model of, Ask an Expert

Economics

The duration of monopoly positions Consider the model of section 6.2, in which the monopolized intermediate goods became competitive with the probability p per unit of time.

a. How do differences in p affect the steady-state properties of the model?

b. What kinds of policy interventions by the government would lead to a first-best outcome in this model? In particular, is it possible to reach the first best solely by subsidizing purchases of the monopolized intermediate goods?

c. If the government can influence p through various instruments (such as antitrust enforcement and patent protection), what are the model's implications about desirable policies?

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Macroeconomics, Economics

Category:- Macroeconomics
Reference No.:- M91922962

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