Which of the Following Supports the Contention That Monopolistic Competitors

question 135

Multiple Choice

Which of the following supports the contention that monopolistic competitors have a strong incentive to engage in R&D?

• A) Entry to monopolistic competitive industries is relatively easy, and thus profit from innovation is quickly competed away.
• B) Most monopolistic competitive industries are decreasing-cost industries.
• C) The desire to differentiate products from competitors may motivate monopolistic competitors to engage in R&D.
• D) Monopolistic competitors have large retained earnings that are available to finance R&D.

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Definitions:

Pay Installments

To make payments for a good or service over a period of time in portions, rather than paying the full amount upfront.

Severance

An owner’s removal of chattel that he has affixed; separation or division of joint ownership; action by one of the co-owners that is inconsistent with joint tenancy.

Joint Ownership

Shared ownership of property by two or more parties where all owners have equal rights and obligations regarding the property.

Right Of Way

A type of easement that allows the crossing of another’s land.