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ECO401 GDB Solution Spring 2017

Question Title

How can a monopolist retain its monopoly?

Question Description

The Case:

Fatima Group is a large group of trading and manufacturing in Pakistan. It was established in 1936. This group started its business with trading of commodities and with the passage of time it has been converted into manufacturing. This group is doing business in textiles, sugar, mining and energy. Fatima Fertilizer Company Limited is the first and the only green field project which has materialized under the “Fertilizer Policy 2001” of the Government of Pakistan, aiming to encourage investors in this field, in view of growing demand of fertilizer in the Country. In 2013, this company invented a formula to make fertilizers that cannot be converted into bomb making material. This company used the ingredient which is non-lethal and is alternative of the ammonium nitrate. Fertilizers which are made by ammonium nitrate can easily be converted into bomb making materials. This is the great achievement and was appreciated by Pentagon.

Requirements:

Being a student of Economics, logically explain how Fatima fertilizers limited can protect its invention of unique formula?  Also explain that protection of invention is good or bad for further inventions.

Solution :

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