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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.
Credit Squeeze:At times private banks become reluctant to issue new credit andloans, frequently because they are worried about risk of default by borrowers. This is common at the t
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FIXED EXCHANGE RATE SYSTEM: National currencies are generally acceptable within the geographical boundaries of a country. As such, trade between countries typically involves
Describe the poverty cycle and suggest how a developing country can break the cycle. The poverty cycle is explained as the trap developing countries can land in; low incomes →
Q. Explain about Employment Rate? Employment Rate: This measures share of working age adults who are in fact employed in a paying position. Employment rate can be a better in
Construct a table indicating the social expected loss corresponding to each combination of precaution choices by the two individuals. (ii) What is the socially efficient combinatio
Explain why each of the following factors may influence the own price elasticity of demand for a commodity. The narrowness of the definition of the commodity
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Explain the link between the rate of interest and inflation. Interest can be explained as the price of money - more expensive money will lead to few loans, higher saving and as
SUMMARY OF THEORY OF PRODUCTION
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