A drug company is deciding how much to invest in Research and Development into finding a cure stomach cancer. The table below shows the company's demand for financial capital for R&D of this drug, based on its expected rates of return from selling the drug. Every investment has an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole.

If the opportunity cost of financial capital for the drug company falls from 7% to 5%, the drug company will invest _______ more in R&D if it receives only the private benefits of this investment.

Question

A drug company is deciding how much to invest in Research and Development into finding a cure stomach cancer. The table below shows the company's demand for financial capital for R&D of this drug, based on its expected rates of return from selling the drug. Every investment has an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole.

If the opportunity cost of financial capital for the drug company falls from 7% to 5%, the drug company will invest _______ more in R&D if it receives only the private benefits of this investment.

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The Answer of A drug company is deciding how much to invest in Research and Development into finding a cure stomach cancer. The table below shows the company's demand for financial capital for R&D of this drug, based on its expected rates of return from selling the drug. Every investment has an additional 4% social return: that is, an investment that pays at least a 5% return to the drug company will create at least a 9% return for society as a whole.

If the opportunity cost of financial capital for the drug company falls from 7% to 5%, the drug company will invest _______ more in R&D if it receives only the private benefits of this investment.

A Drug Company Is Deciding How Much to Invest in Research