Final answer:
The incorrect statement is that 'A patent creates a negative externality', as patents typically result in positive externalities for society due to spillover effects, although they do create monopolies and come with an economic cost.
Step-by-step explanation:
The statement "A patent creates a negative externality" is the incorrect one. Patents do not generally create negative externalities; rather, they can create positive externalities as new technology often leads to benefits that spill over to firms other than the innovator. These spillovers are an example where the social value exceeds the private benefit to the inventor, thereby providing a benefit to society at large. While patents encourage innovation and invention, and indeed create a form of monopoly, this is considered an economic cost rather than a negative externality.
However, it's important to recognize that the concept of negative externalities in relation to patents can indeed be valid in specific contexts. For example, if a patent holder does not exploit the patent or imposes high licensing fees, it can discourage other firms from using the patented technology, which may slow down innovation in that area. But the given statement is incorrect in the typical context of how patents function.