Question:
What does Schumpeter's dynamic view of competition say about entrepeneurs?
Author: Hjalmer PedersenAnswer:
Schumpeter’s dynamic view of competition: • Innovation creates disequilibrium in the market – market power and abnormal profit for the innovator • Other competitors forced to exit or whole industry disappears (creative destruction) • Imitation follows, abnormal profit and market share of innovator declines normal profit and equilibrium will be restored
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