What Is the Difference Between Basic Research and Applied Research

question 29

Essay

What is the difference between basic research and applied research? Which of these will firms have more incentive to invest in, and why?

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Definitions:

Comparative Advantage

The ability of an individual or economy to produce goods or services at a lower opportunity cost than competitors, leading to specialized production and trade.

World Trade Organization

An international organization established to supervise and liberalize world trade, dealing with the rules of trade between nations.

Global Trade

The exchange of goods, services, and capital across international borders and territories.

Trade Disputes

Conflicts that arise between countries or parties due to disagreements over trade policies, tariffs, or market access.