Asked by Diana Stevenson on Apr 27, 2024
Verified
The process by which new firms and new products destroy existing dominant firms and their products is called creative destruction.
Creative Destruction
A concept in economic theory that refers to the process by which new innovation leads to the demise of existing structures and creates new opportunities.
Dominant Firms
Firms that have a major share of the market sales in a particular industry, giving them the power to influence the market's total output and price levels.
New Products
Items that have been recently introduced to the market, offering innovative solutions or improvements over existing products.
- Differentiate among the ideas of diffusion, creative destruction, and technological innovations.
Verified Answer
ML
Monica LizarragaMay 02, 2024
Final Answer :
True
Explanation :
Creative destruction is a theory coined by economist Joseph Schumpeter which refers to the process of new innovations and businesses disrupting and ultimately replacing established ones. It is characterized by the competition between the old and new firms or products, with the latter eventually supplanting the former.
Learning Objectives
- Differentiate among the ideas of diffusion, creative destruction, and technological innovations.