6.Is It Time to Break Up Google?

Google has an 80 percent market share in search advertising. It is a monopoly. In the early 20^th century, Supreme Court Justice Louis Brandeis said, "in a democratic society the existence of large centers of private power is dangerous to the continuing vitality of a free people." He believed that unless it is a natural monopoly it should be broken up.

7.Source: The New York Times, April 22, 2017

a) How would we test whether Google is a monopoly in the Internet advertising market?

b) Explain why the Internet advertising market might be a natural monopoly.

1.Draw a graph that shows the impact on a firm's profits when it increases spending on advertising and the increased advertising has no effect on the demand for the firm's product. This is in a monopolistic competitive industry.