Question

1. use the excerpt below to answer the question.

the costs of developing new products in intellectual property - related industries... can be very high.
... this investment is very risky since the product under development is not assured success in
the market place. only a small percentage... become financially successful for their producers
...
governments often provide a minimum level of market exclusivity to... developers of
products...
—“protecting u.s. intellectual property rights and the challenges of digital piracy,” u.s.
international trade commission, 2003
based on this excerpt, how does governmental protection of intellectual property promote
a free enterprise economy? e.3.1
a. the marketplace is protected from fluctuations in available capital.
b. consumers are protected from the sale of defective products.
c. inventors have a stronger incentive to bring new products to market.
d. governments assume more control over product development.

Explanation:

The excerpt states that developing new products in intellectual property - related industries is costly and risky. Governments provide market exclusivity to product developers. In a free - enterprise economy, this exclusivity (a form of intellectual property protection) reduces the risk for inventors as they can have some control over the market for their new products. This gives inventors a stronger incentive to invest the high costs and take the risks associated with bringing new products to the market.

Option A is incorrect because intellectual property protection is not about protecting the marketplace from capital fluctuations. Option B is incorrect as the excerpt does not mention anything about defective products. Option D is incorrect because free - enterprise economy is about private enterprise having control, and intellectual property protection does not mean the government assumes more control over product development; rather, it provides incentives for private inventors.

Answer:

C. Inventors have a stronger incentive to bring new products to market.