Question

Schumpeter's thesis of "creative destruction" is an explanation of economic progress resulting from: Select one:

Answer 1

Answer:

A. new product producers driving incumbent producers out of business.

Explanation:

Under Schumpeter's view, the concept of creative destruction, which he introduced in his work: capitalism, socialism and democracy, refers to the process of economic innovation, in which some products are replaced by others, or some firms die because they are driven out of the market by others, and so on.

Schumpeter's view of creative destruction was positive, and he thought that it was an essential part of a market, capitalist system, because this system gives economic agents the incentive to innovate.

An classical example of creative destruction ocurred when Steve Jobs introduced the Iphone in 2007. His new product was so much more innovative and preferred, that it literally "destroyed" the market for blackberry and Nokia phones.