Schumpeter’s concept of “creative destruction” implies which of the following about economic cycles and business innovation?
1
Large-scale enterprises stabilize markets, reducing the need for continuous innovation.
2
Disruptive technologies and innovative firms drive economic progress but simultaneously cause outdated businesses and industries to collapse.
3
Market competition promotes gradual change rather than sudden disruptions in industry structures.
4
Government interventions prevent established businesses from failing, ensuring consistent economic growth.