A patent gives a firm the power to charge a price that: Group of answer choices...

Question

Question

A patent gives a firm the power to charge a price that: Group of answer choices...

A patent gives a firm the power to charge a price that:

Group of answer choices

Results in overproduction of a product

Is below equilibrium

Increases the consumer surplus

Is higher than marginal cost

business economics

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Answer 1

Answer #1

Answer

Option 4

Is higher than marginal cost

the power of patent gives the power to set price for the firm means the firm has a downward sloping demand curve and the marginal revenue curve is below it as it slopes doubled than the demand curve.

A firm maximize profit at MR=MC where MR<P and MC<P for a firm with a patent so the patent gives the power to set a price above MC.

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Answer 2

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