Multiple Choice
Which of the following statements is true of a perfectly competitive market?
A) Innovation is less likely in a competitive market because of the free entry and exit of firms.
B) Innovation is likely in a competitive market because of the free entry and exit of firms.
C) The firms in a competitive market invest more in research and development because they face an inelastic demand curve.
D) The firms in a competitive market invest more in research and development because their demand for resources is perfectly elastic.
Correct Answer:
Verified
Correct Answer:
Verified
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