Because of spillovers, the social benefit of research and development:
A) is greater than the private benefit.
B) is less than the private benefit.
C) is equal to the private benefit.
D) may be less than, greater than, or equal to the private benefit.

Question

Quizplus · Accepted Answer

Spillovers occur when the benefits of research and development spill over to individuals or firms other than those directly involved in the production or consumption of the product. These spillovers can take the form of increased knowledge, improved technology, or new products that benefit society as a whole. Therefore, the social benefit of research and development is greater than the private benefit, as it includes both the direct benefits to the producer and the indirect benefits to society.

Because of Spillovers, the Social Benefit of Research and Development