Economics Marginal Utility Questions
The marginal utility of technological innovation influences investment in research and development by determining the additional benefit or satisfaction gained from each additional unit of investment in R&D. If the marginal utility of technological innovation is high, indicating that each additional unit of investment in R&D generates significant benefits or improvements, firms are more likely to allocate resources towards research and development activities. On the other hand, if the marginal utility is low, indicating diminishing returns or limited benefits from additional investment in R&D, firms may be less inclined to invest in research and development. Therefore, the marginal utility of technological innovation plays a crucial role in shaping the level of investment in research and development.