Other things equal, patents
A)decrease the expected rate of return on an R&D expenditure.
B)increase the expected rate of return on an R&D expenditure.
C)increase the interest-rate cost of funds used to finance an R&D expenditure.
D)decrease the interest-rate cost of funds used to finance an R&D expenditure.

Question

Quizplus · Accepted Answer

Patents protect innovations, allowing the innovator to earn higher returns without competition copying the innovation immediately. This increases the expected rate of return on R&D expenditures by providing a temporary monopoly on the patented technology or product.

Other Things Equal, Patents