The following can increase the profits of an innovating firm, except
A) new product introductions.
B) existing product improvements.
C) imitation of its innovation by other firms.
D) successful process innovations.

Question

Quizplus · Accepted Answer

Imitation of the innovation by other firms can lead to a decrease in profits for the innovating firm as competition increases. Therefore, C is the only option that does not increase profits for the innovating firm. A, B, and D all have the potential to increase profits through introducing new products, improving existing products, and implementing successful process innovations, respectively.

The Following Can Increase the Profits of an Innovating Firm