Conducting research and developing new products such as new medicines and drugs is extremely expensive. Firms are often unwilling to undertake these expenses unless they know that they can receive a patent for the product that results from the research. The patent is critical because it grants the firm an exclusive right to sell the new product for a limited time. During the life of the patent, the firm is the sole provider of the product and can charge higher prices, which allow it to recoup the costs of research and development. The price is higher than it otherwise would be, but without ... Read More