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The Table Shows the Rate of Return and R&D Spending

Question 150

Multiple Choice

The table shows the rate of return and R&D spending for a hypothetical firm. Assume the interest-rate cost of funds is 9 percent. What will be the marginal cost and the marginal benefit of the optimal amount of R&D spending? A) MC = 5 percent; MB = 9 percent B) MC = 9 percent; MB = 9 percent C) MC = 9 percent; MB = 13 percent D) MC = 5 percent; MB = 5 percent The table shows the rate of return and R&D spending for a hypothetical firm. Assume the interest-rate cost of funds is 9 percent. What will be the marginal cost and the marginal benefit of the optimal amount of R&D spending?


A) MC = 5 percent; MB = 9 percent
B) MC = 9 percent; MB = 9 percent
C) MC = 9 percent; MB = 13 percent
D) MC = 5 percent; MB = 5 percent

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