(a) Explain the difference between a process and product innovation (b) How does a process innovation (that lowers constant marginal cost) affect a monopolist's choice of price and quantity Use a diagram to answer this question (c) In a static setting, does economic theory suggest that a monopolist has more incentive to develop a process innovation than a new entrant Use a separate diagram to answer this question (a) Explain the difference between a process and product innovation (b) How does a process innovation (that lowers constant marginal cost) affect a monopolist's choice of price and quantity Use a diagram to answer this question (c) In a static setting, does economic theory suggest that a monopolist has more incentive to develop a process innovation than a new entrant Use a separate diagram to answer this

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Question: (a) Explain the difference between a process and product innovation. (b) How does a process innovation (that lowers constant marginal cost) affect a monopolist's choice

(a) Explain the difference between a process and product innovation. (b) How does a process innovation (that lowers constant marginal cost) affect a monopolist's choice of price and quantity? Use a diagram to answer this question. (c) In a static setting, does economic theory suggest that a monopolist has more incentive to develop a process innovation than a new entrant? Use a separate diagram to answer this question.

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