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:

Calculated Data Type

A data type that generates values based on calculations performed on data within a database, often used in fields in a table that require automatic computation.

Access

The ability or right to enter, approach, or use something; in computing, it often refers to the ability to retrieve or modify information in a database or system.

Sequential Number

A number that follows a particular sequence or order, often used for organizing and identifying items in a list or series.

Record

A collection of related fields of information treated as a single unit, often stored in a database or spreadsheet.