When Complementary Resources Are Critical to the Market Success of an Innovation

question 64

Multiple Choice

When complementary resources are critical to the market success of an innovation,

• A)the technical risks are relatively unimportant.
• B)the costs and risks are amplified.
• C)a larger firm with established complementary resources is better placed than a start-up.
• D)b and c.

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Definitions:

Positive Profit

Earnings that exceed the total costs and expenses associated with producing or providing a service or product.

Maximum Profit

The highest possible financial gain that a firm can achieve in a given period, determined by optimizing production and sales while minimizing costs.

Efficient Scale

The level of production at which the average total cost of production is minimized, allowing a firm to achieve the optimal distribution of resources.

Excess Capacity

A situation where a firm's facilities can produce more than is necessary to meet the demand, often leading to underused resources.