What is a trademark and its significance in business?

A trademark is a symbol, word, or combination of both that distinguishes the goods or services of one entity from those of others. It serves as a source identifier for consumers, helping them recognize the origin of a product or service, which is crucial for building brand identity and reputation. The significance of trademarks in business lies in their ability to protect intellectual property, prevent consumer confusion, and enhance brand loyalty. By securing trademark rights, businesses can prevent others from using similar marks that could mislead customers or dilute their brand. This legal protection not only safeguards the company’s image but also adds value to the brand in the marketplace, as consumers often associate trademarks with quality and trust. Thus, the correct answer highlights the fundamental role that trademarks play in establishing and protecting a brand's identity in a competitive business environment.