Which of the following supports the contention that pure competitors have a strong incentive to engage in R&D?
A)Entry to purely competitive industries is easy, and thus profit from innovation is quickly competed away.
B)Pure competitors cannot risk being complacent about innovation because a new product, production technique, or distribution method could undermine their normal
C)Most purely competitive industries are increasing-cost industries.
D)Pure competitors are happy to earn only a normal profit.

Question

Quizplus · Accepted Answer

Pure competitors must innovate to maintain their market position, as any new development by competitors could quickly erode their market share and profits.

Which of the Following Supports the Contention That Pure Competitors