Why Do Firms Spend Money on Costly Innovation

question 105

Multiple Choice

Why do firms spend money on costly innovation?

• A)Competitive markets leave firms no choice but to innovate.
• B)Innovation is a low-risk activity.
• C)Innovation always results in higher profits for firms.
• D)Innovation is usually profitable because the majority of innovations reach the market place.
• E)Because innovation is beneficial for society and firms are motivated to act in ways that are beneficial for society.

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Definitions:

Entrepreneurship Professor

An academic instructor who specializes in teaching, researching, and mentoring students in the field of entrepreneurship and business creation.

Class Enrollment

The process of registering or signing up for academic classes within an educational institution.

Bias

A tendency, inclination, or prejudice towards or against something or someone, often considered unfair.

Forecast Method

Techniques used to predict future demand, sales, and other business metrics to guide decision-making.