From an economic standpoint, patents reduce efficiency because ...

[jCorn1234]

From an economic standpoint, patents reduce efficiency because they serve as a barrier to entry and thus limit market competition. Are there any positive economic benefits of patents? Explain.
 
  What will be an ideal response?

Question 2

Harry's Hookahs incurs 700,000 per year in explicit costs and 500,000 in implicit costs. The company earns 1.4 million in revenues and has 3.7 million in net worth. Based on this information, what is the economic profit for Harry's Hookas?
 
  A) 200,000 B) 700,000 C) 900,000 D) 1.1 million

[gstein359]

Answer to Question 1

Yes. Patents provide an incentive for invention and innovation. Research requires resources that have opportunity costs. If research did not lead to expanded profits, little research would be done. Thus, if patents were not available to protect a firm's profits from competition, we would have less innovation.

Answer to Question 2

A

[jCorn1234]

YES! Correct, THANKS for helping me on my review

[mcabuhat]

Thanks for the timely response, appreciate it