572 Miller Economics Today, Nineteenth Edition
Chapter 24 Monopoly
Stifling Competition for Replacement Ink and Toner Cartridges
There are numerous manufacturers of similar printers, fax machines, and copiers, so the markets for these
businesses are far from monopolistic. Nevertheless, manufacturers are careful to design each model so
that it will accept only ink and toner cartridges with a very specific size and shape. In this way, once a
consumer has purchased a machine, the manufacturer can operate as a monopolistic seller of replacement
ink and toner cartridges. For many of these machine manufacturers, sales of these cartridges, which
generate $40 billion in revenues from worldwide sales, account for more than 50 percent of total
revenues.
In recent years, thousands of new firms have entered the market for ink and toner cartridges. These firms
collect used, empty cartridges, which they repair, refill with ink or toner, and resell at lower prices than
Online Journal Subscriptions and Demand Elasticity and Price Discrimination
JSTOR (Journal Storage) is a nonprofit organization that sells subscriptions for Internet access to back
issues of scholarly journals in fields such as chemistry, literature, and business and economics. To determine
the fees it charges institutions for online subscriptions, JSTOR analyzes the electronic data it accumulates
Technology: No Longer a Barrier to Entry
It used to be said that technology could cause a barrier to entry. Relatively major investments had to be
made in sophisticated and relatively expensive computer systems. Only the largest corporations could
justify such expenses. They could therefore gain a competitive advantage over smaller rivals who could
not justify the technology investment.
Lecture Extender Examples 573
Taxicabs and Medallions
Not too long ago, the city of New York allowed cab drivers to raise their fares by 27 percent. This should
have proven a boom to taxi drivers, but that has not happened. The majority of drivers have to pay lease
fees to the owners of the rights to use a legal cab in New York City. Beneficiaries of the increase in cab
Looking for Lots of Tungsten? The Choices Are Limited
Tungsten is a chemical element that has the highest melting point and the greatest tensile strength of all metals.
Its corrosion resistance is so strong that it can be attacked only slightly by most mineral acids. Combining
Intel Inside
-stakes, high-
manufacturer of microprocessors, Intel, is a monopoly. They point out that to compete effectively with
Intel, a potential adversary would have to invest billions of dollars. Intel provides the critical
574 Miller Economics Today, Nineteenth Edition
Why Students Pay Different Prices to Attend College
Out-of-pocket tuition rates for any two college students can differ by considerable amounts even if the
students happen to major in the same subjects and enroll in many of the same courses. The reason is
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