1. The basic model of pure competition reviewed in this module finds that in the long run all firms in a purely competitive industry will earn normal profits. If all firms will only earn a normal profit in the long run, why would any firms bother to develop new products or lower-cost production methods? Explain. 2. "Ninety percent of new products fail within two years-so you shouldn't be so eager to innovate." Do you agree? Explain why or why not