Question

An In the News article titled "Jury Awards $26 Million For Suppressed Technology" reported, that a county superior court jury in Oakland ordered Universal to pay $25.7 million to two California entrepreneurs. The most correct implication of this is that Universal

Multiple Choice

• Charges lower prices than might be expected in a competitive market.

• Attempted to suppress R&D.

• Is a highly efficient, high-tech industry.

• Makes zero economic profits.

Answer 1

Option B

Attempted to suppress R&D.

Ways in which monopolies typically slow down or stop technical advance include the following:

• Conducting less, and/or less productive, research and development than would be the case if the same industry were more competitive.
• Holding back on offering or using the most advanced technology, even if it is already available. One reason is that very large expenditures might be necessary to apply the new technology to the production equipment or products; such expenditures might provide little benefit to the monopolist and might merely cut into its profits.
• Making great efforts to suppress the development and utilization of new or improved technologies by existing and potential competitors. This is because such advances threaten the monopolist's market share and profits.