Which one of the following statements about the competitive market system is correct?

a. the competitive market system discourages innovation because firms want to get all the profits possible from existing machinery and equipment.
b. the competitive market system encourages innovation because government provides tax breaks and subsidies to those who develop new products or new productive techniques.
c. the competitive market system discourages innovation because it's difficult to acquire additional capital in the form of new machinery and equipment.
d. the competitive market system encourages innovation because successful innovators are rewarded with economic profits.

Afirm wants to hire a project manager (pm) at a salary of $100,000. 30% of pms have high ability, and 70% of pms have low ability. high ability pms generate $120,000 in revenue and low ability pms generate $80,000 in revenue. in addition to differences in productivity, high and low ability pms have different outside offers. if a high ability pm is not hired by the firm, she can work for another company at a salary of $80,000. if the low ability pm is not hired by the firm, she can work for another company for $70,000. high ability pms are also able to get a project management professional (pmp) certification at a cost of $1,000. low ability pms are unable to get a pmp certification (they would fail the test). the firm is not able to observe a pm’s ability, but is able to observe and verify whether or not the pm has a pmp certificate.(a) draw the extensive form of the game. expert answer