There Are Two Existing Firms in the Market for Computer

question 65

Multiple Choice

There are two existing firms in the market for computer chips.Firm A knows how to reduce the production costs for the chip and is considering whether to adopt the innovation or not.Innovation incurs a fixed setup cost of C,while increasing the revenue.However,once the new technology is adopted,another firm,B,can adopt it with a smaller setup cost of C/2.If A innovates and B does not,A earns $20 in revenue while B earns $0.If A innovates and B does likewise,both firms earn $15 in revenue.If neither firm innovates,both earn $5.Under what condition will firm A innovate?

• A) C > 30
• B) C < 30
• C) 10 > C > 0
• D) 35 > C > 25

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Definitions:

Respiration Rate

The number of breaths taken per minute, an important measure of respiratory health and function.

Haldane Effect

Hemoglobin that is not bound to carbon dioxide binds more readily to oxygen than hemoglobin that is bound to carbon dioxide.

Oxygen

A chemical element with symbol O and atomic number 8, essential for breathing and energy production in cellular respiration.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration, absorbed by plants in photosynthesis.