Once It's Patent Application Has Been Accepted, a Firm Is

question 28

Multiple Choice

Once it's patent application has been accepted, a firm is able to earn _______ on its product, which _______.

• A) an increased rate of return for investors; raises doubts further R&D activities
• B) more profit; will allow it to recover the biggest slice of the social value created
• C) monopoly profits; offers an incentive for research and development to take place
• D) competitive profits; creates incentive for continuing innovative R&D projects

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Definitions:

Breakeven

The point at which total revenues equal total costs, resulting in neither profit nor loss.

Unit Selling Price

The price at which individual units of a product are sold to customers, not including discounts or added taxes.

Unit Variable Costs

The costs that vary directly with the level of production or service, measured on a per unit basis.

Total Fixed Costs

The sum of all costs that remain constant regardless of the level of production or sales volume, encompassing items such as rent, salaries, and insurance premiums.