When a First Mover Does Not Have Complementary Assets, Barriers

question 52

Multiple Choice

When a first mover does not have complementary assets, barriers to imitation are high, and there are several capable competitors, the first mover should:

• A) license the innovation to others.
• B) enter into a joint venture to protect the product.
• C) lower the barriers for imitation.
• D) sell the technology outright to another firm.
• E) wait until competitors develop an alternative product.

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product or service.

Recycling

Recycling is the process of converting waste materials into new materials and objects, aiming to reduce the consumption of fresh raw materials and minimize environmental impacts.

Marginal Social Benefit

The additional benefit to society from the production or consumption of one more unit of a good.

Immunize

To provide protection against a disease through vaccination or to safeguard an investment against interest rate fluctuations.