A patent protects the holder from other producers copying the product. This effectively reduces the competition faces by the firm, thereby making the demand faced by the firm
A) Relatively more price-elastic
B) Relatively less price-elastic
C) Unchanged
D) None of the above

Question

Quizplus · Accepted Answer

By holding a patent, a firm faces less competition, making its product more unique in the market. This uniqueness often leads to consumers having fewer substitutes, which in turn makes the demand for the patented product relatively less price-elastic. Consumers are less sensitive to price changes because there are fewer alternative products available.

A Patent Protects the Holder from Other Producers Copying the Product