The computer industry is an example of an industry with innovative activity characterized by zero economic profit.

Question

Quizplus · Accepted Answer

The computer industry is known for its constant innovation and technological advancements, but it is also highly competitive with low barriers to entry. As a result, firms may not earn economic profits in the long run due to intense competition and pricing pressures. However, they may still generate revenue and cover their costs, allowing them to continue investing in research and development. Thus, the computer industry can be an example of an industry with innovative activity but zero economic profit.

The Computer Industry Is an Example of an Industry with Innovative