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 is a theory introduced by Austrian-American economist Joseph Schumpeter in which new products, technologies, and firms replace existing ones, leading to innovation, economic growth, and the overall betterment of society. It is a phenomenon that occurs naturally in market economies due to competition and entrepreneurial activity. Therefore, options A, C, and D are incorrect.

Creative Destruction Is