Which of the following is an example of creative destruction?
A) An economic recession forces firms out of business.
B) Automobile production causes the wagon industry to shut down.
C) Apple earns more economic profits than other manufacturers of MP3 players.
D) Starbucks shuts down stores to create greater demand for its remaining outlets.

Question

Quizplus · Accepted Answer

Creative destruction refers to the process in which new innovations and technologies cause the destruction of existing markets and industries. In this case, the automobile industry's growth caused the wagon industry to shut down, which is an example of creative destruction. Option A is just an economic recession, which is not an example of creative destruction. Option C is an example of economic profit but not creative destruction. Option D is just an example of a marketing strategy and not creative destruction.

Which of the Following Is an Example of Creative Destruction