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Principles of Microeconomics / Unit 8   MIC 0728 short lesson, about 20 seconds

Innovation and the Quiet Life

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The idea

The prospect of monopoly profit spurs invention, the case for patents. Once protected, a monopolist may slacken, since nothing forces it to improve. Both effects are real; their balance is contested.

In practice

One economist's line: the best of all monopoly profits is a quiet life.

Where people slip

The course reports both positions and takes neither; the evidence on which dominates varies by industry.

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