Author Question: Explain why companies that choose low-pollution technologies will find it hard to survive in a ... (Read 99 times)

dollx · **on:** Jun 30, 2018

Explain why companies that choose low-pollution technologies will find it hard to survive in a competitive industry.

Question 2

To increase the money supply, the Fed might:
a. increase the discount rate and sell bonds in the open market.
b. decrease the reserve requirement and buy bonds in the open market.
c. increase the reserve requirement and sell bonds in the open market.
d. increase the discount rate and lower the reserve requirement.
e. sell government securities and increase the discount rate.

pratush dev · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

In order to survive in a competitive industry, a firm must operate at minimum average cost in the long run. It is unlikely that the lowest cost technology is a low-polluting technology. Typically, it costs more to produce using a low-polluting technology. Hence, the firm that chooses the low-polluting technology will incur costs above minimum average cost, and so will not survive in a competitive industry in the long run.

Answer to Question 2

b