From an economic standpoint, patents reduce efficiency because they serve as a barrier to entry and thus limit market competition. Are there any positive economic benefits of patents? Explain
What will be an ideal response?
Yes. Patents provide an incentive for invention and innovation. Research requires resources that have opportunity costs. If research did not lead to expanded profits, little research would be done. Thus, if patents were not available to protect a firm's profits from competition, we would have less innovation.
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What is the long-run effect on the demand curve of a monopolistically competitive firm when more firms enter the market?
a. Demand curve shifts to left. b. Demand curve remains the same. c. Demand curve shifts to right. d. Demand curve become flatter.
Monopolistically competitive firms try to ______ because P ? MC.
a. reduce customer expectations b. reduce customer demand c. keep the same number of customers d. attract more customers