The Globe-Ex Corporation produces industrial-use gamma ray lasers. It is the only producer of these lasers in the U.S. In the first quarter of 2015, Globe-Ex reported accounting profits = $348 million. Globe-Ex has $3000 million ($3 billion) in capital. The normal rate of return is assumed to be 10%.
Given this information, answer the following questions:
Calculate Globe-Exs economic profits. SHOW ALL YOUR WORK.
Use the appropriate market structure diagram to illustrate Globe-Exs economic profit or loss. Specifically identify/label the areas that represent total revenue, total cost, and profit.
b. List two sources of monopoly power and give relevant examples.