Which of the Following Supports the Contention That Pure Competitors

question 227

Multiple Choice

Which of the following supports the contention that pure competitors have a weak incentive to engage in R&D?

• A) Entry to purely competitive industries is easy, and thus profit from innovation is quickly competed away.
• B) In pure competition, products are already highly differentiated.
• C) Most purely competitive industries are increasing-cost industries.
• D) Pure competitors are happy to earn only a normal profit.

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Definitions:

Authority

The power or right to give orders, make decisions, and enforce obedience.

Order

The arrangement or organization of people, tasks, or things following a particular sequence, pattern, or method.

Coercive Power

This refers to the ability of a person to force others to comply with orders or requests through threats, punishment, or negative consequences.

Threat

A potential cause of harm or a danger that may negatively impact something or someone.