In the video,Edwin Mansfield notes that one reason why R&D spending by firms has declined as a percent of national output is that
A) very little is left to invent, since research was so great in the first half of the twentieth century.
B) most research goes to enhance military spending, which is no longer as important as it once was.
C) a firm cannot appropriate all the benefits it creates from R&D, because they spill over to outsiders, so it tends to underinvest in this area.
D) R&D rarely results in marketable products, so increasingly it is being performed in government research facilities.
E) stagflation has made R&D unprofitable for the smaller firms that carry out the largest share of this activity.

Question

Quizplus · Accepted Answer

Edwin Mansfield notes that firms tend to underinvest in R&D because they cannot appropriate all the benefits they create from it, as these often spill over to outsiders. This has led to a decline in R&D spending as a percentage of national output.

In the Video,Edwin Mansfield Notes That One Reason Why R&D