Abstract
It was previously reported that the R&D expenditure for a chemical product is inversely proportional to its market price if it is the sole product of the manufacturer, but the total R&D expenditure for a number of products of an enterprise is practically independent of the prices of individual products. A theory was developed to explain these findings quantitatively. The theory imposes a set of requirements on the distribution of market prices among the products. Data o the petrochemical industries were found to meet the requirements fairly well. The marginal revenues for individual products are also predicted to be independent of the market price, and this argument seems to be supported by the data available at present in spite of considerable scatter. Corrections are made to some results previously reported using new information.
