A patent gives a firm a monopoly in the production of the patented good. While monopoly profits provide an incentive to firms to innovate, the monopoly power imposes a cost on consumers. Why do consumers bear a cost? Is the cost to consumers greater than the profits earned by the monopolist?

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The Answer of A patent gives a firm a monopoly in the production of the patented good. While monopoly profits provide an incentive to firms to innovate, the monopoly power imposes a cost on consumers. Why do consumers bear a cost? Is the cost to consumers greater than the profits earned by the monopolist?

A Patent Gives a Firm a Monopoly in the Production