Asked by Amanda Allen on Jul 02, 2024
Which of the following supports the contention that pure competitors have a strong incentive to engage in R&D?
A) Entry to purely competitive industries is easy and thus profit from innovation is quickly competed away.
B) Pure competitors cannot risk being complacent about innovation because a new product,production technique,or distribution method could undermine their normal profit and drive them out of the market.
C) Most purely competitive industries are increasing-cost industries.
D) Pure competitors are happy to earn only a normal profit.
Pure Competitors
In a purely competitive market, companies sell products that are perfect substitutes for one another, leading to no control over market prices by individual firms.
R&D
Short for Research and Development, it refers to the activities undertaken by companies and organizations to innovate and introduce new products or services.
Innovation
The act of turning a concept or innovation into a product or service that adds value or that consumers are willing to purchase.
- Identify the incentives leading businesses across assorted market frameworks to commit to research and development (R&D) endeavors.
Learning Objectives
- Identify the incentives leading businesses across assorted market frameworks to commit to research and development (R&D) endeavors.
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