Ordinarily, Governments Attempt to Promote Competition in Markets

question 104

Multiple Choice

Ordinarily, governments attempt to promote competition in markets.Why do governments use patents to block entry into some markets when this prohibits competition?

• A)Patents encourage firms to spend money on research necessary to create new products.
• B)Politicians sometimes succumb to pressure from lobbyists to grant favours to businesses for political reasons.
• C)Patents are an important source of government revenue.
• D)Patents are justified because they are an important means for creating network externalities.

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Definitions:

Stimulants

Drugs that speed up activity in the central nervous system.

Central Nervous System

The part of the nervous system consisting of the brain and spinal cord, which integrates information and coordinates all bodily functions.

Speed Up

The act of increasing the rate at which something occurs or is performed.

Tranquilizer

A type of medication used to reduce tension or anxiety, often affecting the central nervous system to induce relaxation.