A Firm Is Concerned About the Possibility of Patent Infringement

question 113

Multiple Choice

A firm is concerned about the possibility of patent infringement and has hired an attorney to review patents. If the attorney is reviewing 100 patents and the marginal cost of reviewing the 100th patent is $40 and the expected marginal benefit of reviewing the 100th patent is $45, which of the following is true?

• A)The firm's total cost of infringement will increase if the number of patents reviewed increases.
• B)The firm's total cost of infringement will decrease if the number of patents reviewed increases.
• C)The firm's total cost of infringement will decrease if the number of patents reviewed decreases.
• D)The firm is minimizing the total cost of infringement.

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Definitions:

Tax Bracket

The range of income taxed at a particular rate under a progressive tax system, with different brackets for different income levels.

Common Stock

A type of security that represents ownership in a corporation, entitling the holder to vote at shareholders' meetings and receive dividends.

Open Market

A system where the trading of goods or securities is conducted freely with minimal or no barriers to entry or regulations.

Fair Market Value

The price that an asset would sell for in the marketplace, determined by the normal interaction between buyers and sellers, free from external pressures.