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

Imitation of an innovation by rivals typically reduces the originator's profits because it increases competition and reduces the uniqueness of the product or service. It does not enhance the innovator's returns to its R&D expenditures; instead, it dilutes these returns by spreading the benefits of the innovation across more competitors.

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