As part of his new job as partner in his own real estate firm, Phil has decided to put on a seminar for new homebuyers. As he’s telling the camera crew what he will be covering during the seminar, he realizes people in the audience could just write down all of his suggestions and then they wouldn’t need his firm anymore. He obviously had not thought this all the way through before setting up the seminar. Unlike physical property, ideas and processes explained in public are often available for anyone to use. Without property rights, Phil’s knowledge has essentially entered the public domain. Companies use intellectual property to maintain market power and extract economic rent from consumers. This market power comes in the form of a barrier to entry.
See more: barriers to entry, industrial organization, intellectual property, market power, patents, property rights
Economics of Modern Family 