According to Schumpeter, what is the role of an entrepreneur in society?a.To disrupt markets and break existing practices.b.To utilize existing knowledge in markets.c.To bring markets back to equilibrium.d.To discover profitable opportunities in markets based on price differentials.
Question
According to Schumpeter, what is the role of an entrepreneur in society?a.To disrupt markets and break existing practices.b.To utilize existing knowledge in markets.c.To bring markets back to equilibrium.d.To discover profitable opportunities in markets based on price differentials.
Solution
The answer is a. To disrupt markets and break existing practices.
Step 1: Understand the question - The question is asking about Schumpeter's view on the role of an entrepreneur in society.
Step 2: Understand Schumpeter's theory - Joseph Schumpeter, an economist, viewed entrepreneurs as innovators who drive the 'creative-destructive' process of capitalism. In his theory, entrepreneurs introduce new products or processes in the market that may render existing ones obsolete.
Step 3: Match the theory to the options - Based on Schumpeter's theory, the role of an entrepreneur in society is to disrupt markets and break existing practices. This is because they introduce innovations that can change the status quo in the market.
Therefore, according to Schumpeter, the role of an entrepreneur in society is to disrupt markets and break existing practices.
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