Asked by Carley Lambeth on Jun 09, 2024
Verified
Who said that the economic profit in a purely competitive economy "will vanish in the subsequent process of competition and adaptation"?
A) Joseph Schumpeter
B) David Ricardo
C) Frank Knight
D) Karl Marx
Purely Competitive Economy
An idealized market structure where many firms sell identical products, entry and exit are easy, and no single buyer or seller can influence the market price.
Economic Profit
Sales minus explicit costs and implicit costs.
Competition
The rivalry among businesses to sell their goods and services to consumers, typically considered healthy for stimulating innovation and keeping prices competitive.
- Describe the role of innovation and risk-taking in economic profit.
- Understand the principles of profit theories and their relevance in contemporary economics.
Verified Answer
IM
injelica morenoJun 09, 2024
Final Answer :
A
Explanation :
Joseph Schumpeter argued that in a purely competitive economy, economic profits would disappear as a result of competition and adaptation, a process he described as "creative destruction."
Learning Objectives
- Describe the role of innovation and risk-taking in economic profit.
- Understand the principles of profit theories and their relevance in contemporary economics.