The competitive market system
A)encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques.
B)discourages innovation because it is difficult to acquire additional capital in the form of new machinery and equipment.
C)discourages innovation because firms want to get all the profits possible from existing machinery and equipment.
D)encourages innovation because successful innovators are rewarded with economic profits.

Question

Quizplus · Accepted Answer

The competitive market system encourages innovation by rewarding successful innovators with economic profits, which serves as an incentive for firms to develop new products or processes to gain a competitive edge.

The Competitive Market System