Final answer:
The accurate statement regarding patents is that they always increase the costs of imitation because they provide the inventor with exclusive rights, preventing others from copying the invention legally unless allowed by the patent holder.
Step-by-step explanation:
The accurate statement regarding patents is A) Patents always increase the costs of imitation. Patents are forms of intellectual property rights that provide the inventor with the exclusive legal right to make, use, or sell the invention for a limited time. This exclusivity can significantly increase the imitation costs because it legally prevents others from copying the invention without permission. The presence of a patent means that any other firm wishing to use the patented invention would need to either obtain permission (often involving licensing fees) or wait until the patent expires.
Economic studies show that even with patents, inventors may only receive a fraction of the total economic value from their inventions, which suggests that patents are imperfect instruments for promoting innovation. Despite this, patents are important as they offer a period of monopoly profits which acts as an incentive for research and development.
Without patents, firms would face immediate competition, earning only normal rates of profit on successful products. In contrast, with a patent, a firm can secure higher returns on their product for the duration of the patent, usually up to 20 years for pharmaceutical drugs. Alternative methods to improve rates of return for inventors could be employed in cases where patents do not adequately fulfill their role.