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Microeconomics Chapter 4

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Chapter 1 and 2

1. Innovation and new technologies have led to longer product life cycles and lowered product obsolescence. FALSE

2. According to the concept of innovation funnel, the number of successful products launched will be greater than the number of raw ideas generated.
FALSE

3. A firm's organizational structure and control systems have no influence on the generation of innovative ideas. FALSE

4. Innovation often originates with those who create solutions for their own needs. TRUE

5. Investing in process innovation helps firms lower their costs. TRUE

6. Technological innovations decrease:
A.
the variety of goods consumers can purchase.

B. the need for differentiation among competitors.

C. the time required to design …show more content…

TRUE

19. An innovation can be competence enhancing to one firm, while competence destroying for another. TRUE

CHAPTER 4

20. The more a technology is adopted:
A.
the less valuable it becomes on account of market saturation.

B. the more susceptible it becomes to decreasing returns of adoption.

C. the better are the opportunities for development of complementary assets.

D. the lesser are the possibilities for improvements in the technology and its applications.

21. As firms develop complementary technologies to improve the productivity or ease of utilization of the core technology, the technology will:
A.
become more attractive to other firms.

B. lose its credibility in the market.

C. lose its dominant design position in the industry.

D. experience a decrease in its installed base.

22. A new technology is most likely to be successful in displacing an existing technology when:
A.
its installed base is significantly less than that of the existing technology.

B. the new technology competes only on the value of its stand-alone utility.

C. it eclipses the combined value of the existing technology's stand-alone utility, its installed base, and its complementary goods.

D. the new technology's perceived and anticipated components of value are lower than its actual components of value.

23. Which of the following is true of dominant design?
A.
It is not possible to have legally

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