The process of creative destruction
Creative destruction happens when new technologies or business models replace old ones. Innovative firms grow, and the businesses they displace shrink or disappear.
Real World
Netflix's rise to dominance destroyed the physical DVD rental market, directly causing Blockbuster's collapse — a textbook example of a new business model eliminating an established industry through innovation.
Exam Focus
Name Schumpeter explicitly in your answer and link creative destruction to dynamic efficiency to signal analytical depth to the examiner.
Price Elasticity of Demand
PED = % change in quantity demanded ÷ % change in price
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