When an innovation spreads among producers, the earlier adopters enjoy longer-lived streams of profit before the market reaches its new long-run equilibrium.

Question

Quizplus · Accepted Answer

This statement is true. Early adopters of an innovation have an advantage because they can establish their brand, acquire customers, and benefit from a market edge before competitors catch up. This allows them to generate profits and build a stronger foundation before the market reaches its new equilibrium.

When an Innovation Spreads Among Producers, the Earlier Adopters Enjoy