Which of the following statements is true of a perfectly ...

[leo leo]

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

Question 2

Another term for negative externalities is
 
  A) bad vibrations.
  B) non-marginal costs.
  C) spillover costs.
  D) sunk costs.
  E) surplus product.

[reelove4eva]

Answer to Question 1

A

Answer to Question 2

C