In the music industry, cassette tapes were replaced by compact discs, which in turn were replaced by the iPod and MP3 technology. This process would be an example of
A) the inverted-U theory.
B) creative destruction.
C) diminishing marginal utility.
D) the law of diminishing returns.

Question

Quizplus · Accepted Answer

Creative destruction refers to the economic process where newer and more efficient technologies replace older ones, leading to the decline and even extinction of the older technologies and industries. This is exactly what happened in the music industry, where the emergence of newer technologies like CDs and iPods led to the decline of cassette tapes.

In the Music Industry, Cassette Tapes Were Replaced by Compact