Why Do Patents Stimulate Research

question 82

Multiple Choice

Why do patents stimulate research?

• A)Patents give firms time to do research.
• B)Patents give firms the opportunity to recover research costs and thus a profit motive.
• C)Firms would research as much even without patents.
• D)Patents don't stimulate research.

---

Definitions:

Short-Run Adjustment

The process by which businesses alter their production levels or inputs in response to short-term changes in market conditions.

Local Bakery

A place of business that specializes in producing and selling bread, cakes, and other baked goods to consumers within a specific area.

Plastics Industry

An economic sector involved in the production, distribution, and recycling of plastic materials and products.

Economic Profits

The excess of total revenues over the total costs (including both explicit and implicit costs) of a business.