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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 concept of opportunity cost
graphing a isoquant
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Explain externality, how can government intervene to achieve allocative efficiency in case of external cost or external benefit? Answer The term externalities refers to bot
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Why is human capital so important in the development process? Explain human capital in terms of (the sum of) education/training/experience/ literacy etc, and clearly show how t
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