Companies That Spend a Relatively Large Share of Their Revenues

question 45

True/False

Companies that spend a relatively large share of their revenues on research and development (R&D)are likely to be licensees,and those that spend very little on R&D are more likely to be licensors.

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Definitions:

Second Best

Refers to a situation wherein the optimal condition cannot be achieved, and the best possible alternative under the given restrictions is adopted.

Previously Existing Distortions

Inefficiencies or imperfections already present in a market before a new policy or change was implemented.

Distortionary Tax

A tax that causes people to alter their behavior and economic decisions from what they would have chosen in the absence of the tax.

Principle of Neutrality

The concept that certain measures, such as fiscal policies, should be designed to have a neutral effect on economic choices and competition.