Consider a hypothetical industry. If firms that perform R&D make product innovations five (5)...
Consider a hypothetical industry. If firms that perform R&D make product innovations five (5) times as often compared to firms that don't, and 10% of the firms perform R&D, how much of the overall product innovation in is achieved by firms that do perform R&D?
Homework Answers
Suppose the firms which are not performing R & D make product innovations of x and the firms which are performing R&D make product innovations of 5x. Now the total firms which are not doing R&D can be taken as 90 ( representing the 90%) and firms which are doing R&D are 10 ( representing the 10%).
So total product innovation is 90x + 10(5x) = 90x + 50x = 140x
innovation achieved by firms that do perform R&D = (50x/140x) * 100
=35.71%
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