Why are patents important to those who hold them

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Reference no: EM13190432

1. A monopolist: 

earns a profit in the short run and the long run.
earns a profit in the short run but not the long run.
can earn profits or incur losses in the short run.
can never incur losses.


2. Why are patents important to those who hold them? 
Without patents, there will no longer be economies of scale in production.
Patents act as a barrier to entry, allowing monopoly profits.
Without patents, there would be considerably more price discrimination in the market.
Patents actually do not matter because they do not guarantee that a firm will make a profit.


3. To maximize profits, a perfectly competitive firm should produce until: 
price is greater than average total cost.
marginal cost is equal to price.
average total cost is minimized.
per unit profits are maximized.


4. The profit-maximizing condition for a perfectly competitive firm is: 
MR = ATC.
MR = AVC.
P = MC.
P = AVC.

Reference no: EM13190432

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