Which of the following is true of a patent?
A)It reduces a firm's incentive to develop new products.
B)It is issued in recognition of new works of art or literature.
C)It gives a firm a permanent exclusive right to produce a new good.
D)It gives a firm a temporary exclusive right to produce a new good.
E)It guarantees economic profits to a firm in the long run.

Question

Which of the following is true of a patent?​
A)It reduces a firm's incentive to develop new products.
B)It is issued in recognition of new works of art or literature.
C)It gives a firm a permanent exclusive right to produce a new good.
D)It gives a firm a temporary exclusive right to produce a new good.
E)It guarantees economic profits to a firm in the long run.

Quizplus · Accepted Answer

A patent is a government-granted exclusive right that gives inventors the exclusive right to manufacture, use, and sell their invention for a limited period of time. Therefore, option D is the correct choice, as it states that a patent gives a firm a temporary exclusive right to produce a new good. Option A is incorrect because a patent encourages firms to develop new products to get the patent rights. Option B is incorrect because works of art or literature can be protected by copyrights, not patents. Option C is incorrect because a patent provides exclusive rights for a limited period of time, usually 20 years. Option E is incorrect because a patent does not guarantee any economic profits to a firm, but it only provides the exclusive right to manufacture, use, and sell their invention.

Which of the Following Is True of a Patent?​

Which of the Following Is True of a Patent?