If a firm in a perfectly competitive industry introduces a lower-cost way of producing an existing product, the firm will be able to earn economic profits in the long run

Which of the following is correct?

a. A period of hyperinflation is a period of extraordinarily low inflation. b. A period of deflation is any period during which the inflation rate is decreasing. c. In the 1970s, U.S. inflation averaged about 7.8 percent per year d. All of the above are correct.

Creative destruction is:

A. the process by which large firms buy up small firms. B. the process by which new firms and new products replace existing dominant firms and products. C. a term coined many years ago by Adam Smith. D. applicable to planned economies but not to market economies.