CFA Practice Question

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CFA Practice Question

Patents do all of the following except ______

I. generate monopoly profits.
II. increase research and development.
III. increase quantity produced above its competitive level.
IV. raise market price above its competitive level.
Correct Answer: III

Patents create monopolies that maximize profits by reducing output below its competitive level.

User Contributed Comments 2

User Comment
johntan1979 Absence of patents discourages R&D and slows innovation.
choas69 CFA passing guide:
1- make a mistake.
2- Learn
3- dont do the mistake in the exam.
4- pass.
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