The Plusses and Minuses of the Patent System Include the Following

question 112

Multiple Choice

The plusses and minuses of the patent system include the following except

• A) giving inventors an incentive to bear the research and development costs of new products.
• B) allowing stodgy old firms to survive longer than they should against innovative rivals.
• C) preventing the existence of "patent trolls" or firms whose main purpose is to sue companies.
• D) possibly hindering creative destruction, especially in complex products that encompass several patents.

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Definitions:

Opportunity Costs

Missing out on possible advantages from various alternatives upon deciding on one.

Sunk Cost

A cost that has already been incurred and cannot be recovered or refunded, and thus should not influence future financial decisions.

Book Value

Book value is the net value of a company's assets found on its balance sheet, calculated as total assets minus total liabilities and intangible assets.

After-Tax Salvage

The net value of an asset after subtracting taxes associated with its sale or disposal.