A firm's marginal benefit from its R&D expenditures is the
A) total amount spent on its R&D activities.
B) expected profit from the last dollar spent on R&D.
C) employment generated by the largest R&D project.
D) resources bought for all of its R&D activities.

Question

Quizplus · Accepted Answer

The marginal benefit from R&D expenditures refers to the additional benefit a firm receives from spending one more dollar on its R&D activities. This can be measured by the expected profit generated by the last dollar spent on R&D, as it represents the incremental return on the latest investment. Option A, C, and D do not accurately capture the concept of marginal benefit.

A Firm's Marginal Benefit from Its R&D Expenditures Is the