Determine the market for electronics. Patents are granted to investors of a product or process for a certain number of years. The reason for this is to encourage innovation in the economy, without the existence of patents; it is argued that development and research for the improved electronics is unlikely to take place, since there's nothing preventing another firm from stealing the idea, copying the product, and producing it.
Which of the following best explains the barriers to entry that exist in this scenario?
- Exclusive ownership of a necessary resource
- Legal barriers
- Economies of scale