The flat-screen plasma TVs are selling extremely well.The originators of this technology are earning higher profits.What theory of profit best reflects the performance of the plasma screen makers?
A) risk-bearing theory of profit
B) dynamic equilibrium theory of profit
C) innovation theory of profit
D) managerial efficiency theory of profit
E) stochastic optimization theory of profit

Question

Quizplus · Accepted Answer

The plasma screen makers are earning higher profits due to their innovation in creating the flat-screen plasma TV technology, which is reflected in the innovation theory of profit. This theory states that firms that create new products or significantly improve existing ones are able to earn higher profits as a result of their innovation.

The Flat-Screen Plasma TVs Are Selling Extremely Well