The document discusses the importance of innovation for firms, highlighting aspects like product and process innovation, economic value, and the role of novelty and appropriability. It promotes the use of Drawpack's visual business diagrams and resources for students and professionals, which are available for free. For more information, users are directed to the website and provided with a contact for inquiries.

1. On Innovation http://www.drawpack.com your visual business knowledge business diagrams, management models, business graphics, powerpoint templates, business slides, free downloads, business presentations, management glossary Why do firms innovate? Product innovation Process innovation Economic value Novelty Appropriability (patent, secrecy...) Escaping from perfect competition Price > marginal cost Monopoly rent Rent X market share (trade off) Monopoly rent Price > marginal cost Escaping from perfect competition Novelty Appropriability (patent, secrecy...) Consumers accept to pay a higher price Costs are decreasing

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