Which of the Following Statements Is Correct? Once a Patent

question 63

Multiple Choice

Which of the following statements is correct? Once a patent expires:
I. monopoly profits increase.
II. deadweight loss is eliminated.
III. generic equivalents appear quickly.

• A) I and III only
• B) III only
• C) II and III only
• D) I and II only

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Definitions:

Capital Lease

A lease considered to have the economic characteristics of asset ownership for accounting purposes.

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset.

Capital Lease

A lease agreement in which the lessee essentially has the economic benefits and risks of ownership, often leading to the asset being recorded on the lessee's balance sheet.

Temporary Use

The use of an asset or resource for a limited period of time, not intended for long-term or permanent use.