A Justification for Patents Is That Without Patents Consumer Surplus

question 60

Multiple Choice

A justification for patents is that without patents consumer surplus would be

• A) larger than with the patent.
• B) zero since the product would not be invented.
• C) only slightly smaller than with the patent.
• D) zero since the monopoly would be a revenue maximizer.

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Definitions:

Labor

The human effort, including both physical and mental, used in the production of goods and services.

Leisure

Time free from work or duties, often used for relaxation, hobbies, or other personal activities.

Nonlabor Income

Income received that does not originate from employment or working, such as dividends, interest, or rental income.

Wage Rate

The fixed amount of compensation or payment given to an employee by an employer in return for work performed, typically expressed on an hourly, daily, or piecework basis.