The Main Argument of Joseph Schumpeter's Idea of "Creative Destruction

question 58

Multiple Choice

The main argument of Joseph Schumpeter's idea of "creative destruction" is that

• A) the existence of monopolies leads to destruction of the environment.
• B) monopoly profits lead to innovation in an effort to sustain them.
• C) short- run profits created by the existence of monopolies will lead to antitrust legislation, which will force the fragmentation of monopolies into competitive industries.
• D) perfectly competitive industries are characterized by more productive innovation and productivity growth than monopolistic industries, which Schumpeter regarded as destructive.
• E) monopolies create profits for themselves at the expense of the destruction of consumer surplus.

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