Which One of the Following Statements Is Correct

question 36

Multiple Choice

Which one of the following statements is correct?

• A) Patents are one way of preventing a monopoly.
• B) If pharmaceutical patents are enforced, the number of new drugs will decrease.
• C) Monopoly profit encourages firms to research and develop new drugs.
• D) Competition creates incentives for the invention of new drugs.

---

Definitions:

Residual Value

The amount for which the lessee can purchase a leased vehicle at the end of the term of the lease.

Compounded Quarterly

Calculating interest on both the initial principal and previously accumulated interest four times a year.

Lease Interest

The interest cost associated with leasing an asset, often a charge in addition to the lease payments.

General Annuity

An annuity in which the payment interval does not equal the compounding interval.