APFIVE What impact would granting patents that create temporary monopolies have on social welfare if companies could continually extend them indefinitely through minor modifications?
It would marginally increase social welfare as continual enhancements improve product quality, though slightly elevated prices may persist longer than ideal
Patents allow for increased competition and encourage productivity effects that are positive for social welfare, even if granted to multiple firms perpetually through minor modifications
Patents stimulate innovation providing overall net positive effects on social welfare by encouraging significant R&D investments even if extended perpetually via incremental changes
It would likely reduce social welfare long-term by preventing new entrants from competing thus stifling innovation outside existing firms’ control while elevating prices above MC indefinitely causing persistent DWLs
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