If a project requires a $20 million investment a year for the next two years, time compression diseconomies mean that you can't get the same results by spending $40 million in one year.MediCure Corp.is a pharmaceutical company that invested $30 million during the last financial year on research.The CEO of its rival company, PolyMed Inc., decides to spend $60 million on the research during the next year in order to exceed the findings of MediCure.However, PolyMed fails to get the same results.Which of the following best reflects the factor that acted as a barrier to imitation for PolyMed Inc.?
A) Tacit knowledge
B) Path dependence
C) Complexity
D) Time compression diseconomy

Question

Quizplus · Accepted Answer

Time compression diseconomy means that investing more money in a shorter period of time can lead to lower efficiency and effectiveness. PolyMed's decision to spend $60 million in one year could have resulted in time compression diseconomies, which may have prevented them from getting the same results as MediCure. Thus, the factor that acted as a barrier to imitation for PolyMed is time compression diseconomy.

If a Project Requires a $20 Million Investment a Year