Other things equal, patents
A) decrease the expected rate of return on an R&D expenditure.
B) increase the expected rate of return on an R&D expenditure.
C) increase the interest-rate cost of funds used to finance an R&D expenditure.
D) decrease the interest-rate cost of funds used to finance an R&D expenditure.

Question

Quizplus · Accepted Answer

Patents provide legal protection to the inventor of a new product or technology, which can lead to a temporary monopoly and higher profits. This, in turn, increases the expected rate of return on an R&D expenditure.

Other Things Equal, Patents