A patent
A)always gives rise to a monopoly.
B)may not provide a barrier to entry.
C)allows the patent owner to capture all of the consumer surplus.
D)increases total welfare.

Question

Quizplus · Accepted Answer

While patents do provide exclusive rights to the inventor or assignee, they may not necessarily create a barrier to entry. Competitors may be able to create non-infringing alternatives or improve upon the patented technology in a way that falls outside the scope of the patent. Therefore, the patent alone may not prevent competition. A is incorrect as a patent may not necessarily give rise to a monopoly. C is incorrect as the patent owner typically captures some, but not all, of the consumer surplus. D is incorrect as while patents incentivize innovation, they may also restrict access and competition, potentially lowering welfare.

A Patent