Firms Operating in Competitive Markets Have Little Choice but to Innovate

question 243

True/False

Firms operating in competitive markets have little choice but to innovate.

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Definitions:

Average Fixed Cost

Is the fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced.

Marginal Cost

The cost associated with producing one additional unit of a product, which can vary depending on the level of production.

Output

The amount of goods or services produced by a person, machine, business, or industry.

Average Fixed Costs

The total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs dilute as production increases.