Asked by Kiersten Deavy on Jul 15, 2024
Verified
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
A process in which technological progress and innovation render existing products or services obsolete, leading to economic development and growth.
Dominant Firms
Companies that hold a large portion of the market share within their industry, influencing the market's pricing and competitive landscape.
Adam Smith
A Scottish economist and philosopher, widely known as the father of modern economics, best known for his theory of the invisible hand and the book "The Wealth of Nations."
- Explain the concept and implications of creative destruction in market dynamics.
Verified Answer
JS
Jessie SmithJul 18, 2024
Final Answer :
B
Explanation :
Creative destruction refers to the process where innovation and new technologies lead to the obsolescence or replacement of older firms and products, driving economic evolution and growth.
Learning Objectives
- Explain the concept and implications of creative destruction in market dynamics.