Question

Which among the following is a competitive advantage that a firm gains through R&D?

• A. It is not suitable for small firms.
• B. Increase in man-hours spent.
• C. An idea that rivals cannot be easily replicated.
• D. It is fruitful only in the long run.

Answer 1

Answer: (C)

An idea that rivals cannot be easily replicated.

Firms invest in R&D because they want to grow by developing new products. It's hard for a company to remain competitive if it does not stay ahead of the technology curve.The RQ can tell firms (and investors) the increase in revenue and market value they can expect from an increase in R&D spending.