Patents

question 87

Multiple Choice

Patents

• A) are granted only to competitive firms and not monopolies.
• B) require that monopolies increase the amount they produce.
• C) increase the incentive to capture economies of scale.
• D) increase the incentive to innovate.
• E) grant the holder a monopoly that lasts forever.

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Definitions:

Actual Costs

The real costs incurred in the production of goods or provision of services, as opposed to estimated or standard costs.

Direct Materials Price Variance

The difference between the actual cost of direct materials used in production and the standard cost, multiplied by the actual quantity of materials used.

Direct Labor Rate Variance

The difference between the actual cost of direct labor and the expected (or standard) cost, used in variance analysis to control labor costs.

Direct Materials Cost Variance

The difference between the budgeted cost of materials for products and the actual cost incurred.