A monopoly created by a copyright on a novel is considered what type of monopoly?

A monopoly created by a copyright on a novel is considered what type of monopoly?

• A. Natural
• B. Geographical
• C. Legal
• D. Technological

Answer: (C)

Copyright gives the creator exclusive rights to reproduce and sell a work, and those rights are granted by law. That makes the monopoly legal or artificial, because the source of the monopoly is government protection, not how efficiently the firm produces or its location or technology. A natural monopoly happens when one firm can serve the market at lower cost due to economies of scale; neither geography nor a new production method created the monopoly here—the arrangement comes from legal rights. A copyright-based monopoly is therefore a legal monopoly, often called an artificial monopoly, since the government allows only the copyright holder to control distribution for a period of time.

Copyright gives the creator exclusive rights to reproduce and sell a work, and those rights are granted by law. That makes the monopoly legal or artificial, because the source of the monopoly is government protection, not how efficiently the firm produces or its location or technology. A natural monopoly happens when one firm can serve the market at lower cost due to economies of scale; neither geography nor a new production method created the monopoly here—the arrangement comes from legal rights. A copyright-based monopoly is therefore a legal monopoly, often called an artificial monopoly, since the government allows only the copyright holder to control distribution for a period of time.