Would Companies and Individuals Invest as Much in Significant Research

question 115

Multiple Choice

Would companies and individuals invest as much in significant research and development if a system of patents were not available?

• A)​Yes they would, because they could still hope to monopolize the market.
• B)​Yes they would, because firms are civic-minded and highly motivated to introduce innovations that improve the standard of living.
• C)​No they would not, because if they made a significant investment in the development, they would be unable to protect the innovations or discoveries long enough to be sufficiently compensated for their efforts.
• D)​No they would not, because the benefits to society of engaging in research and development would be less than the costs to society.

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Definitions:

Date of Record

A specific date set by a corporation on which the shareholders of record are identified as entitled to receive dividends or other distributions.

Stockholders' Equity

The ownership interest of shareholders in the assets of a corporation, calculated as total assets minus liabilities.

Paid-In Capital

Paid-in capital is the amount of money that shareholders have directly invested in a company by purchasing shares during the initial offering or through secondary market transactions.

Par Value

The nominal or face value of a bond, share, or other financial instrument, as stated on the certificate or instrument.