Which of the following statements is true of research and development (R&D)?
A)Small volumes of production enable firms to spread the cost of research and development (R&D), advertising, and general and administrative expenses.
B)The higher a firm's R&D costs, the more the scope for the company to expand globally allowing costs to be spread across more customers.
C)Adding R&D allows a firm to have a cost advantage over competitors.
D)Eliminating R&D helps firms to lead in launching new product designs.

Question

Quizplus · Accepted Answer

B) The higher a firm's R&D costs, the more the scope for the company to expand globally allowing costs to be spread across more customers. This is true because significant investment in R&D can lead to innovations and improvements that make a company's products or services more competitive on a global scale. This, in turn, can increase the customer base over which the R&D costs are spread, potentially reducing the per-unit cost and enhancing the company's competitive position.

Which of the Following Statements Is True of Research and Development