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| New and better goods and services and new and better ways of producing or distributing them. |
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| A period in which technology can change and in which firms can introduce new products. |
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| The first discovery of a product or process through the use of imagination, ingenious thinking, and experimentation and the first proof that it will work. |
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| An exclusive right given to inventors to produce and sell a new product or machine for 20 years from the time of patent application. |
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| The first commercially successful introduction of a new product, the use of a new method of production, or the creation of a new form of business organization. |
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| The development and sale of a new or improved product (or service). |
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| The development and use of new or improved production or distribution methods. |
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| The spread of an innovation through its widespread imitation. |
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| A new firm focused on creating and introducing a particular new product or employing a specific new production or distribution method. |
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| That part of household saving used to finance high-risk business enterprises in exchange for shares of the profit if the enterprise succeeds. |
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| Interest-Rate Cost-Of-Funds-Curve |
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Definition
| As it relates to research and development (R&D), a curve showing the interest rate the firm must pay to obtain any particular amount of funds to finance R&D. |
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| Expected-Rate-Of-Return Curve |
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Definition
| As it relatees to research and development (R&D), a curve showing the anticipated gain in profit, as a percentage of R&D expenditure, from an additional dollar spent on R&D. |
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| The level of R&D at which the marginal benefit and marginal cost of R&D expenditures are equal. |
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| The potential for a firm's rivals to produce a close variation of (imitate) a firm's new product or process, greatly reducing the originator's profit from R&D and innovation. |
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| An approach by a dominant firm in which it allows other firms in its industry to bear the risk of innovation and then quickly becomes the second firm to offer any successful new product or adopt any improved production process. |
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| A theory saying that, other things equal, R&D expenditures as a percentage of sales rise with industry concentration, reach a peak at a four-firm concentration ratio of about 50 percent, and then fall as concentration further increases. |
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| The hypothesis that the creation of new products and production methods simultaneously destroys the market power of existing monopolies. |
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