Those Who Contend That Oligopolists Are Less Likely Than More

question 37

Multiple Choice

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.

---

Definitions:

Excess Capacity

The additional production capability that a business can utilize without incurring additional fixed costs, often seen as an opportunity for growth.

Minimum Price

The lowest price at which a product or service can be sold, often determined by covering at least the costs of production or market regulations.

Special Order

A one-time customer order typically at a reduced sale price, which does not disrupt regular production or sales activities.

Constrained Resource

A critical resource within a process or system that has a capacity limit potentially affecting overall performance or output.