Schumpeter Argues That the Rate of Technological Change Is Likely

question 34

Multiple Choice

Schumpeter argues that the rate of technological change is likely to be greater in imperfectly competitive industries because imperfectly competitive firms

• A) earn profits that support expenditures on research and development.
• B) lack the power necessary to keep rivals from imitating their innovations.
• C) have a vested interest in maintaining demand for existing products.
• D) use their power to keep out rivals who would be more inclined to use new techniques.
• E) are composed of a large number of independent decision-making units that are less inclined to be conservative.

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Definitions:

Equilibrium Price

The market value at which there's a perfect match between quantity of goods available and quantity desired by buyers.

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Production Function

A model in mathematics that delineates how production inputs are related to the output generated.