Patents
A) specify the term of exchange, facilitating exchange between strangers.
B) increase the profitability of inventions, encouraging firms to develop new products.
C) provide the public with reliable information about the performance of a firm.
D) increase the risk faced by entrepreneurs.

Question

Quizplus · Accepted Answer

Patents increase profitability of inventions by granting exclusive rights to inventors for a specified period, thereby preventing competitors from producing and selling a similar product. This encourages firms to invest in research and development and create new products, as they are assured of having a temporary monopoly and can recoup their costs.