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Ayesha Qadir Class Teacher 2-H JT-Pre
on Nov 26, 2024

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In the inverted-U theory of R&D,

A) process innovation and product innovation are inversely related.
B) technological change is inversely related to scientific discovery.
C) R&D expenditures rise continuously as a percentage of firms' sales as industry concentration rises.
D) R&D expenditures first rise as a percentage of firms' sales as industry concentration increases, but then fall as higher industry concentration occurs.

Inverted-U Theory

suggests that there is an optimal level of some variable, beyond which its effect starts to decline or become negative.

R&D Expenditures

are the costs associated with the research and development activities of a company or country, seeking to innovate, improve products, and explore new markets.

Industry Concentration

A measure of the degree to which a small number of firms dominate total industry output, sales, or employment.

  • Familiarize yourself with the inverted-U theory detailing the association between industry concentration and investments in research and development.
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Taylor BarrowDec 02, 2024
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