Final answer:
Innovation is the process of creating new products, often allowing companies to achieve temporary competitive advantages and above-normal profits by fulfilling customer demands and improving supply or demand conditions.
Step-by-step explanation:
Creating new products that customers want to purchase is called innovation. Innovation involves incrementally or radically modifying an existing product, system, or process to improve it, often resulting in new products with desirable characteristics that consumers want or providing ways to produce products more cost-effectively. Companies like Samsung, under leadership such as the CEO Gregory Lee, emphasize the relentless pursuit of innovation to discover new technology and possibilities, thereby gaining a competitive edge and the potential for above-normal profits before the competition can catch up.
Market competition can spur firms to discover new technologies or improve product qualities to meet increasing demands or shift supply and demand curves favorably. This demonstrates how innovation can not only satisfy customer needs but also position a firm favorably within a competitive market environment, ultimately impacting supply and demand dynamics.