Because knowledge capital is nonexcludable and nonrival, firms have an incentive to ________ the research and development of other firms.
A)make bids on
B)not use
C)ignore
D)free ride on
E)steal

Question

Quizplus · Accepted Answer

Since knowledge capital is nonexcludable and nonrival, firms can benefit from the research and development of other firms without incurring any costs. This creates an incentive for firms to "free ride on" the R&D of others, rather than investing in their own R&D efforts.

Because Knowledge Capital Is Nonexcludable and Nonrival, Firms Have an Incentive