Which of the following would explain why large firms possess a greater incentive to engage in research and development of new drugs than small firms do?

Question

Quizplus · Accepted Answer

Large firms have greater resource capability, which means they have more money, personnel, and expertise to put into research and development. They also have the ability to absorb more risk, as they have diversified portfolios and revenue streams. Additionally, large firms can benefit from research economies of scale, meaning they can spread the costs of research and development over a larger number of products and customers. All of these factors give large firms a greater incentive to engage in research and development of new drugs than small firms.

Which of the Following Would Explain Why Large Firms Possess