Schumpeter and Galbraith argue that,in a dynamic sense,innovation is less likely in
A) monopoly.
B) pure oligopoly.
C) monopolistic competition.
D) perfect competition.
E) differentiated oligopoly.

Question

Quizplus · Accepted Answer

Schumpeter and Galbraith argue that in perfect competition, firms have little incentive to innovate because any gains made from innovation will be competed away quickly. In contrast, in monopolies or pure oligopolies, there may be more incentive for firms to innovate in order to maintain their dominant position in the market. In monopolistic competition or differentiated oligopoly, there may be some incentive for firms to innovate in order to differentiate their products and stand out from competitors, but this may not lead to as much dynamic innovation as in perfect competition.

Schumpeter and Galbraith Argue That,in a Dynamic Sense,innovation Is Less