HP ties its printer ink to its printers by embedding a patented printer head in its ink cartridge rather than build it into the printer. This raises the cost of producing the ink cartridge. If the government passed a law requiring HP ink be used with HP printers, would this law increase or decrease deadweight loss?
A) decrease
B) increase
C) no change
D) impossible to say

Question

Quizplus · Accepted Answer

The law would increase deadweight loss by creating a monopoly for HP ink cartridges.

HP Ties Its Printer Ink to Its Printers by Embedding