"Government works to create a competitive marketplace because it believes competition helps markets function well. Yet government also awards patents, which prevent competition. Why are both competition and the patent system, seemingly working at cross purposes, essential to creating a large economic pie

The correct answer is that both competition and patent system encourages business owners to grow and develop better in circunstances.

Explanation:

To begin with, a competitive marketplace generates the free entrance from entrepreuners to the market no matter how many other competitors are and it also encourages every company to make their products or services better for the consumers due to the fact that if the do not do that then the other competitors will, therefore that competition makes the best of every party.

Secondly, the patent system does also encourages the business owners and helps the economy because it assures them that no matter how many competitors there are, the product that they invent will be protected by the federal government and the law so they will be free to create something unique and obtain big profits from that.

To sum up, the reason why both the competition and the patent system are essential to creating a large economic pie is due to its capacity of encouraging the business owners to grow and develop.

answer; rapid growth in buyer demand and high buyer switching cost;

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