Question

What effect might market power have on technological​ change? Market power results in A. ​marginal-cost pricing, leaving no resources with which to invest in new technology. B. economic​ efficiency, which eliminates the need for new technology. C. economic profits that can be spent on research to develop new products. D. economic​ profits, leaving no incentive to develop new products. E. no barriers to​ entry, allowing new firms to begin producing​ technologically-improved substitutes.

Answer 1

Answer:

C. economic profits that can be spent on research to develop new products.

Explanation:

The most appropriate alternative to this question is the letter b. Because market power can have an effect on technological changes in the use of economic profits that can be spent on research for the development of new products.

Market power can be defined as the ability of an economic agent to be able to maintain its prices above its competitive market and still increase its profit and not lose its customers. Therefore, in the situation exposed in the question, in the case of technological innovations, the profit obtained by the market power of a certain company would be reverted to research that would assist in the development of innovative products that would be responsible for maintaining the organization well positioned and maintaining its market power. and competitiveness.