Which of the Following Supports the Contention That Pure Competitors

Multiple Choice

Which of the following supports the contention that pure competitors have a strong incentive to engage in R&D?

A) Entry to purely competitive industries is easy, and thus profit from innovation is quickly competed away.
B) Pure competitors cannot risk being complacent about innovation because a new product, production technique, or distribution method could undermine their normal profit and drive them out of the market.
C) Most purely competitive industries are increasing-cost industries.
D) Pure competitors are happy to earn only a normal profit.