Question

The flat-screen plasma TVs are selling extremely well. The originators of this technology are earning higher profits. What theory of profit best reflects the performance of the plasma screen makers?

Answer 1

Answer:

Innovation theory of profit.

Explanation:

The theory of profit innovation was defined by Schumpter, and corresponds to the economic profit that a company can achieve through the innovation of products and services offered.

The role of the entrepreneur is to offer successful innovations that will influence his performance in the market and consequently increase his profit.

Therefore, according to Shumpeter, innovation corresponds to any set of policies that will help an organization to reduce costs related to the production process or increase demand for products and services.