Final answer:
Research and Development (R&D) lowers costs primarily by streamlining processes. This includes making manufacturing more efficient, reducing waste, and improving product design. Innovations developed through R&D can lead to significant production cost savings.
Step-by-step explanation:
A major way in which Research and Development (R&D) can help to lower costs is by streamlining processes. R&D can lead to innovations that make manufacturing more efficient, reduce waste, or enhance product design to use less expensive materials or components. This in turn can increase productivity and reduce production costs. For instance, optimizing a production line through the use of advanced technologies developed through R&D can mean fewer resources are needed, from raw materials to energy, thereby saving money.
Other options such as increasing salaries, expanding product lines, and outsourcing overseas can actually incur additional costs rather than reduce them. While outsourcing can access cheaper labor markets, this is more about cost savings through wage differences, which is not directly related to R&D efforts. Advanced R&D could potentially result in automation that might reduce the need for outsourcing by making local production more competitive.