Semi-Salt Industries began its operation in 1975 and remains the only firm in the world that produces and sells commercial-grade
polyglutamate. While virtually anyone with a degree in college chemistry could replicate the firm’s formula, due to the relatively high cost, Semi-Salt has decided not to apply for a patent. Despite the absence of patent protection, Semi-Salt has averaged accounting profits of 5.5 percent on investment since it began producing polyglutamate—a rate comparable to the average rate of interest that large banks paid on deposits over this period.
1. Do you think Semi-Salt is earning monopoly profits? Why?
1. Do you think Semi-Salt is earning monopoly profits? Why?
1 answer:
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