c. Diffusion. i. Define it,

ii. Explain how it works,

iii. Give 3 examples involving firms that have lead diffusion of some innovation and why these represent good examples of diffusion,

iv. Discuss how diffusion might be affected by a slow growth / no growth economy. 1. Since diffusion is not free, how might it be impacted by economies that are not growing or only growing slowly?

d. You work for Mr. Elon Musk and he has asked you to explain how his company can determine its optimal level of R&D spending. i. Please explain the general concept of optimal level of R & D spending

ii. List and explain the marginal cost and marginal benefit components 1. You have a good list of items in the slide set - just need to provide explanations of the items.

iii. Explain how the optimal level of R & D spending is computed. 1. Feel free to use graphs to support your explanation.2. Don't forget to let him know that returns are expected, not guaranteed