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:

Social Rewards

Benefits or recognitions received from others in a social context, often as a result of one's behavior or achievements.

Absolute Deprivation

A condition characterized by the lack of basic resources necessary for maintaining minimum living standards.

Social Strain

A concept in sociology that suggests individuals may experience pressure, discomfort, or dissonance when societal goals and the means to achieve them do not align.

Organizations

Entities structured to achieve specific objectives, involving a group of people working together under defined rules and leadership.