What effect do patents have on competition?
A)They increase competition by putting downward pressure on price.
B)They increase competition by encouraging new companies to enter a market.
C)They reduce competition by fixing the price of the product so it cannot fall.
D)They reduce competition by creating a barrier to new companies entering a market.

Question

Quizplus · Accepted Answer

Patents create a barrier to new companies entering a market by giving exclusive rights to the patent holder to produce and sell the patented product. This reduces the competition by limiting the number of companies that can enter the market and offer similar products.

What Effect Do Patents Have on Competition