Final answer:
If a LaserTech rival divested its industrial laser manufacturing in response to new technology, it would be an example of competitive dynamics, which entail strategic actions taken by firms to maintain or enhance their market position.
Step-by-step explanation:
If one of LaserTech's rivals were to divest its industrial laser manufacturing business in response to LaserTech's new technology, this would be an example of competitive dynamics. Competitive dynamics are the actions and reactions between firms as they compete for an advantageous market position. When a rival firm divests in response to innovative technology from a competitor, it demonstrates the adjustments and strategic decisions companies make to maintain or improve their competitive position.
In the broader context of competitive strategies, when a monopolistic competitor earns positive economic profits, this can attract new firms into the market. However, if existing firms perceive a threat from a new technology that they cannot match, they may exit the market or reallocate resources elsewhere, hence demonstrating competitive dynamics. Unlike collusion, where firms act together to reduce output and keep prices high, or a cartel where there's a formal agreement to produce the monopoly output and sell at the monopoly price, competitive dynamics involve independent strategic moves by firms.