Asked by April Thompson on Jul 21, 2024
Verified
Creative destruction is not automatic because:
A) there are major obstacles to the entry of new innovative firms into concentrated industries.
B) consumer tastes are highly unstable.
C) corporate takeovers increase dynamic competition.
D) large firms rarely are technologically progressive.
Creative Destruction
A concept in economics where new innovation leads to the obliteration of older industries or ways of doing things, driving economic development.
Concentrated Industries
Industries where a few companies dominate the market share, resulting in less competition and potentially higher prices for consumers.
Innovative Firms
Companies that focus on developing new products, services, or processes, driving change and progress within their industries through innovation.
- Comprehend the idea of creative destruction and its role in the progression of markets and companies.
Verified Answer
KJ
Kerine JohnsonJul 25, 2024
Final Answer :
A
Explanation :
Creative destruction faces major obstacles due to the concentration of industries, making it difficult for new and innovative firms to enter the market. This is because established players have already secured resources and strong market position, and can often use their power to exclude new entrants. The other options are either incorrect or not relevant to the concept of creative destruction.
Learning Objectives
- Comprehend the idea of creative destruction and its role in the progression of markets and companies.