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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.
what are the criticisms of modern theory of rent?
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What is return on investment? Return on investment is the profit earned by investing in some business or some project, for instance investment in stock exchange. Profit earned
Marginal Utility and Indifference Curve - If the consumption of a product moves along an indifference curve, additional utility derived from the increase in consumption of sing
how does the prices system affect a country
The Hypothesis of Inflation-Unemployment Trade-off : This hypothesis about formation of expectations is therefore known as the hypothesis of adaptive expectations. The hypothes
What is an index number?compile a chart of the types of consumer price index numbers showing-the agency who prepares it,index formula,target group,groups of items covered and the w
The Healthy Spring Water company sells bottled water for offices / homes. The price of the water is $20 per 10 gallon bottle and the company currently sells 2,000 bottles per day.
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