In Order to Fully Realize the Gains from Entrepreneurial Innovation

question 75

Multiple Choice

In order to fully realize the gains from entrepreneurial innovation,

• A) the government should subsidize potential entrepreneurs.
• B) it must be relatively easy for people to put their ideas in motion.
• C) it must be relatively difficult to continue implementing a bad idea.
• D) both a and b must be true.
• E) both b and c must be true.

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Definitions:

Monopolistic Competition

An economic setup in which several companies offer products that are closely related but not exactly the same, granting them a certain level of influence over the market.

Nash Equilibrium

The situation that occurs in some simultaneous games wherein every player is playing his or her dominant strategy at the same time and thus no player has any reason to change behavior.

First-Mover Advantage

In game theory, the benefit obtained by the party that moves first in a sequential game. A situation that occurs in a sequential game if the player who gets to move first has an advantage in terms of final outcomes over the player(s) who move subsequently.

Simultaneous Game

A strategic interaction (game) between two or more parties (players) in which every player moves (makes a decision) at the same time.