Which of the Following Supports the Contention That Pure Competitors

question 221

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:

Accrued Revenues

Revenues earned by a company for goods or services provided but not yet billed or received by the end of the accounting period.

Employee Wages

Compensation paid to employees for their labor or services, calculated on an hourly, daily, or piecework basis.