Suppose that a firm's monthly marginal return from every dollar spend on research & development is equal to: MB = 2 - Q 50 where Q is the monthly sum spent on R&D, in thousands of dollars. An additional benefit of 1- Q /100 is created for all other firms in the industry, due to innovation spillovers. %3D a) How much will this firm choose to spend on R&D each month?

Suppose that a firm's monthly marginal return from every dollar spend on research & development is equal to: MB = 2 - Q 50 where Q is the monthly sum spent on R&D, in thousands of dollars. An additional benefit of 1- Q /100 is created for all other firms in the industry, due to innovation spillovers. %3D a) How much will this firm choose to spend on R&D each month?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.10P

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