Patents
A) increase the incentive to innovate.
B) require that monopolies increase the amount they produce.
C) increase the incentive to capture economies of scale.
D) are granted only to competitive firms and not monopolies.
E) grant the holder a monopoly that lasts forever.

Question

Quizplus · Accepted Answer

Patents provide a legal protection to inventors, thereby increasing the incentive to invest in research and development and come up with new innovative products or processes. The exclusivity granted by a patent for a specified period of time allows innovators to earn higher profits and recoup their investment costs.