Those Who Contend That Oligopolists Are Less Likely Than More

question 157

Multiple Choice

Those who contend that oligopolists are less likely than more competitive firms to engage in R&D say that

• A) oligopolists have little incentive to introduce costly new technology and produce new products when they currently are earning large economic profit using existing technology and selling existing products.
• B) the undistributed profits of oligopolists give them a source of readily available, relatively low-cost funds for financing R&D.
• C) entry barriers enable oligopolists to sustain the profits they gain from innovation.
• D) the large size of oligopolists' R&D departments allows them to use very specialized, expensive R&D equipment and employ teams of specialized researchers.

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Open Market

A freely competitive market in which any buyer or seller can participate, and prices are determined by supply and demand.

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