If the Marginal Revenue from R&D Is Less Than the Marginal

question 41

Multiple Choice

If the marginal revenue from R&D is less than the marginal cost, a profit-maximizing firm will

• A) decrease the amount it spends on R&D.
• B) increase the amount it spends on R&D.
• C) leave unchanged the amount it spends on R&D.
• D) stop spending on R&D altogether.
• E) probably decrease its spending or R&D, but it may increase it.

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