Karen Is Trying to Assess Whether She Can Start Her

question 103

Multiple Choice

Karen is trying to assess whether she can start her own small business. But, as with many small businesses, money is a problem. She asks for your help. You indicate that the most likely source of money for starting up a small business is

• A) family investment.
• B) lottery winnings.
• C) banks.
• D) credit unions.
• E) personal savings.

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Definitions:

R&D Expenditures

Funds allocated towards research and development activities in order to innovate or improve products or services.

Imitation Problem

The potential for a firm’s rivals to produce a close variation of (imitate) a firm’s new product or process, greatly reducing the originator’s profit from R&D and innovation.

Innovation Diffusion

The process by which new ideas, practices, or technologies spread within a population or society, influencing patterns of adoption and utilization.

Patents

Patents are legal documents granted by the government that give inventors exclusive rights to their innovations for a specific period, preventing others from making, using, or selling the invention without permission.