What would happen if the government chooses to increase the number of years that a firm can enjoy patent protection from 20 years to 25 years?
What will be an ideal response?
Because the time that a firm can enjoy monopoly rights increases, the firm will receive a larger profit with longer patent protection. This will entice more firms to invest in research and development, in the hopes of creating more patents and more profits. However, while this policy increases the creation of higher cost new products or technology, it will reduce the market efficiency for those products that would have been produced under the old 20 year rule. Those markets will display lower production and higher prices for a longer time.
You might also like to view...
A price-taker faces a demand curve that is:
A. upward sloping. B. horizontal at the market price. C. downward sloping. D. vertical at the market price.
There is an asset demand for money primarily because of which function of money?
A. medium of exchange B. store of value C. legal tender D. measure of value
The figure above illustrates the current market for workers in Lima, Peru
a) Without any government intervention, what is the equilibrium wage rate and amount of employment? b) If the city government imposes a minimum wage of $3 an hour, what is the amount of employment? Does the minimum wage create any unemployment? Why or why not? c) If the city government imposes a minimum wage of $6 an hour, what is the amount of employment? Does the minimum wage create any unemployment? Why or why not?
The U.S. federal government embraced all of the Populists' requests, including the nationalization of the railroad system
Indicate whether the statement is true or false