Patents stimulate investment
A)by giving inventors an incentive to incur up-front costs of developing new products
B)by giving tax breaks to inventors
C)by guaranteeing a profit from new products
D)by lowering interest rates
E)through government payments that cover costs of research and development

Question

Quizplus · Accepted Answer

Patents provide a legal monopoly for a limited period of time, which gives inventors the exclusive right to produce and sell their invention. This provides an incentive to invest in research and development and to incur up-front costs to bring new products to market. Without the protection of a patent, an inventor may be hesitant to invest in developing a new product if there is a risk that a competitor could simply copy the product and start selling it without incurring the same research and development costs.

Patents Stimulate Investment