If There Are Large Fixed Costs Due to Research and Development

question 83

Multiple Choice

If there are large fixed costs due to research and development, perfect competition does not generate new ideas because:

• A) firms need to recoup these costs through higher profits.
• B) with monopolistic competition, prices are equal to the marginal cost.
• C) with monopolistic competition, prices are equal to the marginal cost minus a markup.
• D) perfectly competitive firms always set prices lower than the marginal cost.
• E) the government does not adequately fund innovation.

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Definitions:

Array

A data structure consisting of a collection of elements (values or variables), each identified by at least one array index or key.

Invalid Statement

A code sequence that does not conform to the syntax rules of its programming language.

Integer Array

A collection of integers stored in contiguous memory locations, allowing for indexing and manipulation of the stored integers.

Address Operator

An operator in C and C++ denoted by &, used to determine the memory address of a variable.