Why would the government create monopoly power by granting a firm a patent that prevents other firms from competing with the patent holder?
Because patents encourage firms to develop new technologies and even new goods, and the government
considers this encouragement, and its results, beneficial to the economy.
You might also like to view...
If a production process creates pollution, a competitive market produces excessive pollution because
A) private marginal cost of pollution exceeds its social marginal cost. B) social marginal cost of pollution exceeds its private marginal cost. C) the marginal benefit of pollution to the firm is zero. D) zero pollution is optimal.
A business incurs the following costs per unit: Labor - $125/unit; Materials $45/unit and rent - $250,000/month. If the firm produces 1,000,00 . units a month, the total variable costs equal
a. $125Million b. $45Million c. $1Million d. $170Million
Incentives are not likely to pose a problem:
A. if the interests of the employees and the employers are perfectly aligned. B. if the interests of the employees and the employers conflict somewhat. C. as long as employers can exploit the employees. D. if the interests of the employees and the employers conflict.
Suppose that the labor cost-total cost ratio in industry A is 82 percent while in industry B it is 21 percent. Other things equal, labor demand will be:
A. more elastic in industry A than in B. B. relatively inelastic in both industries A and B. C. more elastic in industry B than in A. D. relatively elastic in both industries A and B.