In this video, we explore the costs and benefits of monopolies. We cover how monopolies and patents breed deadweight loss, market inefficiencies, and corruption.

In this video, we explore the costs and benefits of monopolies. We cover how monopolies and patents breed deadweight loss, market inefficiencies, and corruption.

But we also look at what would happen if we eliminated patents for industries with high R&D costs, such as the pharmaceutical industry. Eliminating patents in this case may result in less innovation and, specifically, fewer new drugs being created. We also consider some of the tradeoffs of patents and look at alternative ways to reward research and development such as patent buyouts and using prizes to foster innovation.

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Patents cause the price of existing items to be higher, but it encourages innovation in the pursuit of profit. Removing patents will cause the price of existing items to drop, but less innovation will occur as creating new ideas is no longer as profitable.

The logic on the drug question: Old people don't want strong pharmaceutical patents because they take a lot of pharmaceutical drugs and they want them to be as cheap as possible. Young people want strong pharmaceutical patents, so when they do need them in the future they have more options.

The logic on the video game question: Old fashion games are existing items, so removing patent protection would lower the cost of purchase. Cutting edge games haven't been developed yet. Strong patent protection will cause more cutting edge games to be developed.

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