MICROECONOMICS-ACCESS CARD <CUSTOM>
11th Edition
ISBN: 9781266285097
Author: Colander
Publisher: MCG CUSTOM
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Question
Chapter 16, Problem 11IP
(a)
To determine
Advantage of prizes of patents.
(b)
To determine
Cost of prizes over patents.
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Students have asked these similar questions
Which of the following are examples of how patents are not always a perfect way to encourage innovation:
Group of answer choices
patents in the U.S. do not last very long.
it is very expensive to apply for a patent
not every new idea can be protected with a patent or copyright.
A patent effectively allows a firm to operate as a monopoly while the patent is in effect. Some people argue that the market
power created by patents harms consumers and shouldn't be granted. Others argue that patents are needed to encourage
research and innovation. You can read the article from Forbes to learn more about the history and policy surrounding
patents.
Classify the arguments below as either arguments for patents or arguments against patents.
Arguments For Patents
Arguments Against Patents
Answer Bank
prevents free-riding
encourages higher prices for consumers
prevents competition in the market
research results in a positive externality for society
leads to an ineffient level of production
The Netherlands abolished its patent
system in 1869. What did subsequent
innovation in the Netherlands teach us
about patents?
Since more low-income households
started inventing, patents must be an
exclusive institution
Since fewer women were inventing,
patents are an inclusive institution
Patents aren't necessary for innovation,
but they can affect the types of innovation
we get.
Without patents, societies become
stagnant
Chapter 16 Solutions
MICROECONOMICS-ACCESS CARD <CUSTOM>
Ch. 16.1 - Prob. 1QCh. 16.1 - Prob. 2QCh. 16.1 - Prob. 3QCh. 16.1 - Prob. 4QCh. 16.1 - Prob. 5QCh. 16.1 - Prob. 6QCh. 16.1 - Prob. 7QCh. 16.1 - Prob. 8QCh. 16.1 - Prob. 9QCh. 16.1 - Prob. 10Q
Ch. 16 - Prob. 1QECh. 16 - Prob. 2QECh. 16 - Prob. 3QECh. 16 - Prob. 4QECh. 16 - Prob. 5QECh. 16 - Prob. 6QECh. 16 - Prob. 7QECh. 16 - Prob. 8QECh. 16 - Prob. 9QECh. 16 - Prob. 10QECh. 16 - Prob. 11QECh. 16 - Prob. 12QECh. 16 - Prob. 1QAPCh. 16 - Prob. 2QAPCh. 16 - Prob. 3QAPCh. 16 - Prob. 4QAPCh. 16 - Prob. 5QAPCh. 16 - Prob. 6QAPCh. 16 - Prob. 1IPCh. 16 - Prob. 2IPCh. 16 - Prob. 3IPCh. 16 - Prob. 4IPCh. 16 - Prob. 5IPCh. 16 - Prob. 6IPCh. 16 - Prob. 7IPCh. 16 - Prob. 8IPCh. 16 - Prob. 9IPCh. 16 - Prob. 10IPCh. 16 - Prob. 11IP
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Similar questions
- If patents reduce competition, why does the federal government grant them? The federal government grants patents A. to increase the number of close substitutes available. B. to prevent network externalities. C. to create natural monopolies. D. to encourage firms to collude. E. to encourage firms to spend money on research to create new products.arrow_forwardQ60arrow_forwardUnder which circumstances is patent protection most necessary? Where information about technological improvements disseminates slowly Where information about technological improvements disseminates rapidly In a market with few sellers Where the cost of research and development is very lowarrow_forward
- Give typing answer with explanation and conclusion When a pharmaceutical company discovers a new drug, patent law gives it market power by guaranteeing: Question 7 options: sole ownership of the right to sell the drug for a limited number of years. partial ownership of the right to sell the drug for an unlimited number of years. sole ownership of the right to sell the drug for an unlimited number of years. partial ownership of the right to sell the?arrow_forwardHow can countries control Monopoly power using public policy or law?arrow_forwardPatent for NoSmak. A potential new drug. NoSmak, cures lip-smacking with one dose, but research and development would cost $50 million. The monopoly profit (earned while a single firm produces the product) will be $5 million per year. After a patent expires, the original developer of the drug will have sufficient brand loyalty to earn $2 million per year for another 10 years. a. What is the shortest patent length required to induce a firm to develop the drug? years. (Enter your response as an integer)arrow_forward
- If Congress reduced the period of patent protection from 20 years to 10 years, what would likely happen to the amount of private research and development?arrow_forwardExhibit 12.4 The Market Demand Curve for Claritin Price $8 With patent protection from the government, the demand curve that Schering-Plough faces for its sales of Claritin is the entire market. For example, if Schering-Plough chose a price of $4, then it would be able to sell 400 million units, but the demand curve shows that if it chose a price of $6 or higher, it wouldn't sell any Claritin, despite having a monopoly. 7 4 3 2 DClaritin 1 Let's assume/lestimate: What would the market 100 200 300 400 500 600 700 800 price and the quantity be under perfect competition? Demand: p=7-x/150 Quantity (in millions of pills) Cost = 1*x %3D And what for the Marginal Cost c'=1 monopoly?arrow_forwardExamples of this market from uae or Gcc countries : 1- competitive market: 2-monopoly : 3-monopolistic competition : 4-oligopoly:arrow_forward
- Genentech owns a patent on tissue plasminogen activator (TPA), which is an enzyme that helps the body break down blood clots. TPA is particularly valuable to cardiac patients, since it often allows heart problems to be treated with medication rather than surgery. Recently, however, firms in the medical industry have come under fire by some members of Congress and the press for charging high prices and earning monopoly profits. a. If the government stripped Genentech and other pharmaceutical firms of their patents, do you think cardiac patients would benefit? Why?arrow_forwardwhy do many economists, pundits, and government officials continue to believe that the state must possess the power to regulate, or even to break up, firms simply because some particular firms are today large or “dominant”?arrow_forwardAndrew Carnegie's monopoly in steel was never as complete as John D. Rockefeller's monopoly in oil. But even after the breakup of Standard Oil in 1914, monopolies kept developing -- including more "natural" monopolies such as Microsoft and Facebook. Why does the government of the USA continue to attempt to break up monopolies? What is the economic rationale? A. Monpolies are inherently anti-consumer. B. Monpolies are a natural consequence of technoogical innovation, and are seen by some economists as evidence of the superiority of capitalism because the market rewards competition. C. Monopolies are problematic because of price-fixing, which is achieved mainly after they become established, not because of the aggressive competition required to out-compete rivals before market dominance is achieved. D. All the above.arrow_forward
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