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Explain what occurs when a new technology makes another one obsolete in terms of economic profit.

8. Explain what occurs when a new technology makes another one obsolete in terms of economic profit. Consider firm A to be an existing firm using the old technology. Firm B is the new firm with the new technology. Firm A earned positive profits for years, but with the entrance of Firm B, Firm A’s goods and services are no longer desired.

 

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