Creative destruction is:

A) the process by which large firms buy up small firms.
B) the process by which new firms and new products replace existing dominant firms and products.
C) a term coined many years ago by Adam Smith.
D) applicable to planned economies but not to market economies.

Creative Destruction

The hypothesis that the creation of new products and production methods destroys the market power of existing monopolies.

Dominant Firms

Companies that have a major share of sales in a specific market, significantly influencing that market's dynamics.

New Firms

Newly established businesses entering the market, often bringing innovation or increasing competition in their industry segment.