Which of the Following Is an Example of Creative Destruction

question 128

Multiple Choice

Which of the following is an example of creative destruction?

• A)An economic recession forces firms out of business.
• B)Automobile production causes the wagon industry to shut down.
• C)Apple earns more economic profits than other manufacturers of MP3 players.
• D)Starbucks shuts down stores to create greater demand for its remaining outlets.

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Definitions:

Additional Shift

Implementing an extra work period within a 24-hour timeframe to increase production capacity.

Selling Price

The amount of money for which a product or service is sold to the customer.

Fixed Costs

Costs that do not change with the level of production or sales volume, such as rent or salaries.

Widgets

A generic term often used to refer to a fictional or unspecified product or gadget.