What would be the economic dangers of eliminating patent protection in the pharmaceutical industry as a means of "eliminating monopoly power"?
What will be an ideal response?
It is certainly true that in some cases patents allow companies including pharmaceutical firms to enjoy a legal monopoly albeit a temporary one. However, eliminating patent protection could lead to the result of fewer drugs being brought to market. The reason is that the profit potential will be removed when firms know that their discoveries and expensive research can easily and legally be reproduced by rival firms.
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The loanable funds market brings together savers and borrowers to determine the
a. marginal rate of return on investment b. rate of time preference c. market rate of interest d. marginal resource cost of investment e. marginal revenue product of investment
Interdependence among firms is characteristic of: a. perfectly competitive markets
b. monopoly markets. c. oligopoly markets. d. monopolistically competitive markets.
If a sharp drop in asset prices forces borrowers to sell off additional assets, then asset prices will ________.
A. become sticky downwards B. start to rise C. fall further D. not fall any further
Many economists challenged the idea of passive government involvement in the economy following the inflation of the 1970s and early 1980s, and the recessions of 1974-1975 and 1980-1982.
Answer the following statement true (T) or false (F)