According to Schumpeter,the Large Profits Often Realized from Innovation Tend

question 24

Multiple Choice

According to Schumpeter,the large profits often realized from innovation tend to be transitory because

• A) interest rates rise, causing the value of the innovator's assets to fall.
• B) the state taxes away most of these excess earnings.
• C) innovators sell their businesses by going public, and stock prices are very unpredictable and unstable.
• D) rival firms are induced to copy the innovations, and thus entry of new firms drives down profits.
• E) they result from contrived scarcities resulting from the use of monopoly power.