Final answer:
The optimal investment in R&D for HighFlyer Airlines at a 6% interest rate is where the social return of 9% equates to the interest rate. Since 9% is greater than 6%, more investment is encouraged until these rates align.
Step-by-step explanation:
The subject of this question is regarding the social rate of return on research and development (R&D) investments and finding the optimal investment level. A private return of 7% with an additional social return of 2% sums to a 9% social return. To determine the amount of investment that is socially optimal, one would compare the social return rate with the prevailing interest rate. If the social return on investment is higher than the interest rate, it would be beneficial for more investment to be made until the marginal social return equals the interest rate. In this case, the social return of 9% is higher than the interest rate of 6%, indicating that investment is below the socially optimal level, and more should be invested in R&D until the social return equates to the interest rate of 6%.