Use the Below Decision Tree Illustrating the R&D Process for a New

question 61

Multiple Choice

Use the below decision tree illustrating the R&D process for a new drug to answer the following question(s) . Provided Dollar amounts in the decision tree are in millions.
-How many event nodes are observed in the given decision tree?

• A)2
• B)3
• C)4

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Definitions:

Technological Change

The overall process of invention, innovation, and diffusion of technology or processes.

Returns to Scale

The rate at which output increases in response to proportional increases in all inputs or resources, reflecting the production efficiency of a firm.

Long-Run Average Total Cost

The per unit cost of production in the long run, where all inputs, including capital, are variable.

Slope

The measure of the steepness, incline, or grade of a line, often calculated as the ratio of the vertical change to the horizontal change.