Spending on innovation can be modeled in terms of a kinked marginal revenue curve.Explain what this model predicts about how rivals will react to a firm increasing its spending on innovation compared with decreasing its spending, and how that affects the firm's revenues.

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The Answer of Spending on innovation can be modeled in terms of a kinked marginal revenue curve.Explain what this model predicts about how rivals will react to a firm increasing its spending on innovation compared with decreasing its spending, and how that affects the firm's revenues.

Spending on Innovation Can Be Modeled in Terms of a Kinked