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1.5 Perfect competition, imperfectly competitive markets and monopoly

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Question 28

For over a decade, a dominant enterprise software corporation maintained an 85% market share in project management suites, protected by high customer switching costs. Recently, a wave of open-source collaborative platforms utilizing decentralized, AI-driven workflow automation has emerged. These platforms bypass traditional licensing fees, attract a massive self-sustaining developer base, and are rapidly eroding the incumbent's market share, rendering its legacy software suite obsolete.

Which concept in competitive market dynamics does this process of market entry and technological displacement best illustrate?

Sunk cost recovery

X-inefficiency

Creative destruction

First-mover advantage

1.5 Perfect competition, imperfectly competitive markets and monopoly Questions

  1. A Level
  2. /Economics
  3. /1.5 Perfect competition, imperfectly competitive markets and monopoly