Creative destruction is
A) the process by which large firms buy up small firms.
B) the process by which new firms and new products replace existing dominant firms and products.
C) a term coined many years ago by Adam Smith.
D) applicable to planned economies but not to market economies.

Question

Quizplus · Accepted Answer

Creative destruction refers to the process by which new firms and products replace existing dominant firms and products through innovation and competition. It is a concept introduced by Austrian economist Joseph Schumpeter in the early 20th century, and it is a key driver of economic growth and progress in market economies. Options A, C, and D are incorrect as they do not accurately define creative destruction.

Creative Destruction Is