Product innovation contributes to technological advance primarily by
A) decreasing allocative efficiency.
B) increasing allocative efficiency.
C) decreasing productive efficiency.
D) increasing productive efficiency.

Question

Quizplus · Accepted Answer

Product innovation contributes to technological advance primarily by increasing allocative efficiency. Allocative efficiency is the ability to allocate resources in a way that maximizes their value. Product innovation can help to increase allocative efficiency by creating new products that are more valuable to consumers than existing products. This can lead to a more efficient allocation of resources, as consumers will be willing to pay more for the new products.

Product Innovation Contributes to Technological Advance Primarily by