IP Is Characterized by Significant Development Costs and Very High

question 36

True/False

IP is characterized by significant development costs and very high marginal costs. It may take a substantial investment to develop a software program, an idea, or a digital music tune.

---

Definitions:

Property Rights

The rights to use, control, and obtain the benefits from a good or resource.

External Costs

Costs of a transaction or activity that affect parties who did not choose to incur that cost, often not reflected in the market price.

Social Cost

The total cost to society as a whole, including both private costs incurred by firms or individuals and external costs imposed on others.

Free Riders

A person who receives the benefit of a good without paying for it. Because it is often virtually impossible to restrict the consumption of public goods to those who pay, these goods are subject to free-rider problems.