Questions: Why does the government issue patents? The government issues patents A. to encourage competition among firms in markets with barriers to entry. B. to encourage firms to spend money on the research and development necessary to create new products. C. to ensure that new products are safe and effective for consumers. D. to limit excessive economic profits in the short run before new firms have had time to enter profitable markets. E. to prevent firms from keeping secret how a product is made. How long do patents last? A patent is the exclusive right to a product for a period of 30 years from the date the patent is filed with the government. (Enter your response as an integer.)

Why does the government issue patents? The government issues patents A. to encourage competition among firms in markets with barriers to entry. B. to encourage firms to spend money on the research and development necessary to create new products. C. to ensure that new products are safe and effective for consumers. D. to limit excessive economic profits in the short run before new firms have had time to enter profitable markets. E. to prevent firms from keeping secret how a product is made. How long do patents last? A patent is the exclusive right to a product for a period of 30 years from the date the patent is filed with the government. (Enter your response as an integer.)
Transcript text: Why does the government issue patents? The government issues patents A. to encourage competition among firms in markets with barriers to entry. B. to encourage firms to spend money on the research and development necessary to create new products. C. to ensure that new products are safe and effective for consumers. D. to limit excessive economic profits in the short run before new firms have had time to enter profitable markets. E. to prevent firms from keeping secret how a product is made. How long do patents last? A patent is the exclusive right to a product for a period of 30 years from the date the patent is filed with the government. (Enter your response as an integer.)
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Solution

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Answer

The answer is B.

Explanation
Option A: To encourage competition among firms in markets with barriers to entry.

This option is incorrect because patents actually create temporary monopolies by granting exclusive rights to the patent holder, which can reduce competition in the short term.

Option B: To encourage firms to spend money on the research and development necessary to create new products.

This option is correct. Patents provide an incentive for firms to invest in research and development by granting them exclusive rights to profit from their innovations for a limited period. This exclusivity helps firms recoup the costs associated with developing new products.

Option C: To ensure that new products are safe and effective for consumers.

This option is incorrect. Ensuring the safety and effectiveness of new products is typically the role of regulatory agencies, such as the Food and Drug Administration (FDA) in the United States, not the patent system.

Option D: To limit excessive economic profits in the short run before new firms have had time to enter profitable markets.

This option is incorrect. Patents actually allow firms to earn higher profits by providing them with a temporary monopoly. The intention is to reward innovation, not to limit profits.

Option E: To prevent firms from keeping secret how a product is made.

This option is incorrect. While patents do require the disclosure of how a product is made, the primary purpose is to encourage innovation by providing exclusive rights, not to prevent secrecy.

Regarding the duration of patents, the correct response is 20 years, not 30 years. The standard term for a patent is 20 years from the filing date, according to most international standards, including those of the United States Patent and Trademark Office (USPTO).

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