Those who contend that oligopolists are less likely than more competitive firms to engage in R&D say that:

A) oligopolists have little incentive to introduce costly new technology and produce new products when they currently are earning large economic profit using existing technology and selling existing products.
B) the undistributed profits of oligopolists give them a source of readily available,relatively low-cost funds for financing R&D.
C) entry barriers enable oligopolists to sustain the profits they gain from innovation.
D) the large size of oligopolists' R&D departments allows them to use very specialized,expensive R&D equipment and employ teams of specialized researchers.

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Mirna Francis · Accepted Answer

Final Answer : A, Explanation :  Oligopolists may have little incentive to engage in costly R&D as they already have a significant market share and are earning high profits using existing technology and products. This lack of competition reduces the pressure on them to innovate in order to maintain their market position, unlike firms in more competitive markets who may need to constantly innovate to stay ahead of their rivals.

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