Final answer:
Competing technologies in the shakeout phase may result in a market with many small competitors or a few large dominant firms, often influenced by the reach and management capabilities provided by information and communication technologies.
Step-by-step explanation:
The potential outcomes for competing technologies in the shakeout phase could involve a scenario where certain factors may favor either a future with a larger number of small competitors or a "winner-take-all" market dynamic. On one side, advancements in technology could allow small firms to expand their reach and find customers globally, leading to a larger number of these entities.
On the other side, technology might also enable a single or few large companies to dominate the market, similar to Microsoft in software or Amazon in online bookselling, where one company commands a significant share of the sales.
Furthermore, improved information and communication technologies might simplify the management of various operations worldwide, thus favoring larger corporations. This ongoing battle between the forces of smallness and largeness is a key focus for economists, businesspeople, and policymakers.
If one input becomes relatively more expensive, firms are likely to react by seeking out alternative production technologies that rely less on the costlier input or allow for more efficient use of it. They may also consider substituting the expensive input with a cheaper alternative to maintain cost-effectiveness and competitiveness.
When new technology leads to a substantial reduction in costs of production in a perfectly competitive market, it often results in increased supply, lower product prices, and potentially higher demand. In the long term, profits may normalize across the industry, but initially, firms adopting the new technology may realize increased profits.