Patents
A) will create a profit incentive to do research.
B) might be welfare reducing if granted for too long a period.
C) serve as a barrier to entry.
D) All of the above.

Question

Quizplus · Accepted Answer

A) Patents provide a profit incentive to do research as they allow inventors to have exclusive rights to their creations for a limited time period. This encourages them to invest in research and development, with the hope of monetizing their discoveries.
B) While patents incentivize research, if they are granted for too long a period, they might not promote welfare enhancement, as the cost of using patented technology or products would be high, leading to reduced competition, higher prices, and reduced innovation. 
C) Patents serve as a barrier to entry as they prevent other companies from entering certain markets, offering similar products or technologies during the patent period. This can lead to reduced competition and higher prices, which might not be in the best interest of consumers.