Technological substitution involves the introduction of a radically new technology that has a higher marginal rate of return on investment in R&D than the current technology in the industry.

Question

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Technological substitution refers to the process where a new technology offers a significantly higher return on investment in research and development compared to the existing technology, leading to the older technology being replaced or significantly diminished in use. This is because the new technology provides greater efficiency, cost-effectiveness, or other advantages.

Technological Substitution Involves the Introduction of a Radically New Technology