Author Question: What might be some of the causes and consequences of industrial concentration? Provide some ... (Read 98 times)

londonang

  • Hero Member
  • *****
  • Posts: 540
What might be some of the causes and consequences of industrial concentration? Provide some examples.
 
  What will be an ideal response?

Question 2

What is meant by the statement that optimal decisions are made at the margin?
 
  What will be an ideal response?


ntsoane kedibone

  • Sr. Member
  • ****
  • Posts: 333
Answer to Question 1

Some industries are more concentrated than others because of technical properties of their production technologies or unique characteristics of the markets they serve. Economies of scale, which allow firms to reduce their average costs as they increase their rates of output, favor large-scale production over small-scale production. Thus, industries for which scale economies are important (e.g., auto manufacturing and petroleum refining) are expected to be more concentrated than others in which costs do not fall as rapidly as output expands (e.g., cut-and-sew apparel manufacturing). Similarly, concentration tends to be higher in industries, such as aircraft and semiconductor manufacturing, where learning curves generate substantial production-cost savings as additional units of the original model or design are made.

Answer to Question 2

In economics, the word marginal means extra or additional. Economists reason that the optimal decision is to continue any activity up to the point where the marginal benefit equals the marginal cost, so optimal decisions are made at the point where the extra benefit received from an activity is equal to the extra cost associated with that activity.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question


 

Did you know?

Coca-Cola originally used coca leaves and caffeine from the African kola nut. It was advertised as a therapeutic agent and "pickerupper." Eventually, its formulation was changed, and the coca leaves were removed because of the effects of regulation on cocaine-related products.

Did you know?

Eating food that has been cooked with poppy seeds may cause you to fail a drug screening test, because the seeds contain enough opiate alkaloids to register as a positive.

Did you know?

The Centers for Disease Control and Prevention has released reports detailing the deaths of infants (younger than 1 year of age) who died after being given cold and cough medications. This underscores the importance of educating parents that children younger than 2 years of age should never be given over-the-counter cold and cough medications without consulting their physicians.

Did you know?

The average person is easily confused by the terms pharmaceutics and pharmacology, thinking they are one and the same. Whereas pharmaceutics is the science of preparing and dispensing drugs (otherwise known as the science of pharmacy), pharmacology is the study of medications.

Did you know?

The people with the highest levels of LDL are Mexican American males and non-Hispanic black females.

For a complete list of videos, visit our video library