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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.
consumers oriented application
Demand Pull Inflation and Cost-Push Inflation: Demand Pull Inflation: It describes a sustained increase in the general price level that is caused by a permanent increase in n
Comment on the current account trend since 2013 till 2015
Answer in True or Flees 1. "Revealed preference methods for valuing environmental services and goods (for example hedonic price method, travel cost model, etc.) can reveal non-
Much of undergraduate macroeconomic theory is discussed on the assumption that, in the short run, the expectations of economic agents about the future values of macroeconomic varia
Explain crowding out and why it may be considered important for policy makers. Crowding out refers to how enhanced government borrowing (real borrowing!) might serve to raise i
How have falling commodity prices affected many developing countries? Definition of commodities; raw material like copper, iron and bauxite; and agricultural goods like rice an
The End of the Malthusian Age We clearly no longer live in a Malthusian age. For at least 200 years improvements in the efficiency of labor made possible by new technologies a
what are the sources of monopoly power
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