Why might product development be efficient and why might it be inefficient?
What will be an ideal response?
Product development might be efficient if the development represents actual improvements to the product and not simply the perception of improvement. The value of these new innovations to the consumer is the marginal benefit or the extra amount consumers are willing to pay to have the new product. If the marginal benefit to the consumer is equal to the marginal cost of product development, then development is efficient.
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Another term for the real-balance effect is
A) the substitution effect. B) the wealth effect. C) the indirect effect. D) the interest rate effect.
An increase in the price of Product X leads to a decrease in demand for Product Y. The price increase also increases the demand for Product Z, a related good. Discuss the relationship between these products