How can technological advance result in creative destruction?
Please provide the best answer for the statement.
Rival firms must follow the lead of innovative firms that are making economic profits. If the rival firms fail to do so, they can suffer economic losses and eventually fail or be bought by other firms. Sometimes technological advance actually destroys industries because an old product is no longer needed with a new innovation put on the market, a situation referred to as creative destruction. The innovation creates a new product, but in the process of doing so it effectively destroys an industry. One example would be the automobile which eventually destroyed the market for horse-drawn carriages.
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Suppose that Sally always buys exactly 5 bars of English toffee each week, regardless of whether the toffee bars are regularly priced at $1 or on sale for $0.50 . Based on this information, what is Sally's price elasticity of demand for English toffee in this price range?
a. Cannot be determined. b. 0 c. Infinity d. 1
India is not a member of the China-ASEAN (Association of South East Asian Nations) free-trade area implemented on January 1, 2010. As a result, India fears that some of its:
a. exports to China will be diverted to ASEAN countries. b. exports to the United States will be diverted to China. c. exports to China and to ASEAN countries will be diverted to trade among members of the China-ASEAN free-trade area. d. imports from ASEAN countries will be diverted to China.
A bond is
A) a debt instrument, that is, the issuer has taken out a loan. B) an equity instrument, that is, the buyer has purchased ownership in the issuer's firm. C) the same thing as a stock. D) a short-term loan from the government.
Increased government spending on unemployment insurance during a recession is an example of:
A. expansionary fiscal policy. B. contractionary fiscal policy. C. discretionary fiscal policy. D. an automatic stabilizer.