How Can Technological Advance Result in Creative Destruction

question 28

Essay

How can technological advance result in creative destruction?

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Definitions:

Common Fixed Expenses

Expenses that remain constant in total regardless of changes in the level of activity or volume of production.

Variable Expenses

Costs that change in proportion to the level of activity or volume of production in a company.

Traceable Fixed Expenses

Fixed costs that can be directly associated with a specific business segment or product line.

Fixed Manufacturing Overhead

Costs in the production process that remain constant regardless of the production volume, such as rent or salaries of permanent staff.