Which of the following is true?
A)Patents reduce a firm's incentive to develop new products.
B)Patents are given for new works of art or literature.
C)Patents give a permanent exclusive right to produce a new good.
D)Patents give a temporary exclusive right to produce a new good.
E)Patents guarantee economic profits.

Question

Quizplus · Accepted Answer

Patents give a temporary exclusive right (usually 20 years from the date of filing) to produce a new good. This temporary monopoly incentivizes firms to invest in and develop new products, knowing they will have exclusive rights to profit from them for a limited amount of time. However, once the patent expires, the product enters the public domain and can be produced by anyone, leading to increased competition and potentially lower prices for consumers.

Which of the Following Is True