Ordinarily, Governments Attempt to Promote Competition in Markets

question 274

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 favors 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:

Exclusive Lines

Products or services available for sale only through specific channels or retailers, often to maintain quality or brand prestige.

Transparent Pricing

A pricing strategy where businesses clearly communicate price components and the cost of production to customers, fostering trust and understanding.

Business Model

A strategic plan outlining how a company creates, delivers, and captures value, in economic, social, cultural, or other contexts.

Attract Customers

Strategies or practices aimed at drawing in potential clients or customers to a business or product.