Which of the following statements does not apply when a firm's rivals imitate its innovation.
A) It tends to reduce the originator's profits
B) It enhances the innovator's returns to its R&D expenditures.
C) It is often the path to widespread diffusion of the innovation.
D) It helps other firms incorporate innovative features into their own operations.

Question

Quizplus · Accepted Answer

When rivals imitate a firm's innovation, it tends to reduce the originator's profits, helps other firms incorporate innovative features into their own operations, and often leads to widespread diffusion of the innovation. However, it does not enhance the innovator's returns to its R&D expenditures because the imitators are essentially free-riding on the innovator's initial investment.

Which of the Following Statements Does Not Apply When a Firm's