The monopoly firm has a patent that is about to expire. A new start-up firm has entered the market with a new method and has applied for patent protection. Which of the strategies below make the most economic sense for the monopoly firm?

Question

Flake

Social Studies

2 May, 22:45

The monopoly firm has a patent that is about to expire. A new start-up firm has entered the market with a new method and has applied for patent protection. Which of the strategies below make the most economic sense for the monopoly firm?

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Answers (1)

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Zackary · Answer 1

The correct answer to the following question will be "Acquire start-up firm and Continue production".

Explanation:

Because of reasonable competition and comparatively low cost, a monopoly company can achieve long-term profit and continue or expand development. After some time, a monopoly that persists in stopping the entrance of new companies or firms capable of producing its commodity would see its obstacles bypassed by inventions, and it is, therefore, necessary for a dominant corporation to adapt the business strategy and stay current with industry changes. Hence purchasing the start-up company would make good business sense for themselves.