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Fact 13.3.1 What the Apple-Samsung Verdict Means for Your Smartphone
A California jury found Samsung guilty of violating the majority of the patents in question, including software features like double-tap zooming and scrolling. It recommended that Apple be awarded more than $1 billion in damages. This verdict could significantly affect both smartphone users and producers.
Source: CNN Money, August 26, 2012
-Refer to Fact 13.3.1. Suppose the smartphone market becomes perfectly competitive. Choose the statement that is incorrect when we compare the perfectly competitive market to a monopoly.
A)Society gains.
B)Producers of smartphones gain.
C)Consumers of smartphones gain.
D)Total surplus increases.
E)Deadweight loss is eliminated.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, producers do not have monopoly power and therefore do not gain excess profits. They may benefit from increased demand and lower costs due to competition, but their individual profits are limited. The other statements are correct - society gains from more efficient allocation of resources, consumers benefit from lower prices and increased choices, total surplus increases due to higher quantity traded, and deadweight loss is eliminated.

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