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Where minimum efficient scale is very huge for capital intensive operations, it may be more cost effective to allow one company to spread its fixed costs over a very huge number of consumers, rather than have various competing firms suffer the fixed costs of a minimum efficient scale and have to share a customer base. There are various industries that are very capital intensive and need large initial investments to operate. These types of firms are frequently natural monopolies. Railroads, electric generating companies, and air lines needs tens of millions of dollars in fixed costs.
Foreign Direct Investment: It is an investment by a company (based in one country) in an actual operating business, including real physical capital assets (such asmachinery, buildi
Q. What is Climate Change? Climate Change:As a consequence of cumulative emission of carbon dioxide (a by-product of fossil fuel use) and other chemicals over past two centurie
The State of Confidence in Conventional Judgements : While individuals fall back on conventions to guide their behaviour in the face of uncertainty, they are also aware that th
Explainbainlimitpricetheory
Government Budget Deficits Governments have been traditionally spending more what they could earn by way of taxes and sale of economic goods and services produced by them. The
This firm will maximize profits by producing the level of output that corresponds to point: a. b. c. or d. ?? Refer to Figure for a perfectly competitive firm. Given the
explain how the keynesian cross shows that the economy is susceptible to self-fulfilling prophesies, either positive or negative
Problem 1: a) Explain the different types of unemployment that exist. b) Critically examine how monetary policy can be used to deal with inflation. c) Critically examine
Simple Inventory Model Firstly, the product level initiates a demand, which generates a demand at the component level and then in turn at the raw material level. Think of an
The Long-Run Supply of Housing * Scenario 1: Owner-occupied housing - Suburban or rural areas - National market for inputs * Questions - Is this an increasing or co
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