Spending on innovation will tend to be represented by a kinked marginal revenue curve.

Question

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Spending on innovation will tend to be represented by a kinked marginal revenue curve because the marginal revenue from innovation is likely to be higher in the early stages of the innovation process, when the innovation is new and there is less competition. As the innovation becomes more established and competition increases, the marginal revenue from innovation is likely to decline.

Spending on Innovation Will Tend to Be Represented by a Kinked