Why is it difficult to determine whether an industry is operating efficiently when there is rapid technological process underway?
What will be an ideal response?
The reason is that rapid technological process typically brings about continued falling marginal and average total cost. Since you never know where those costs are headed its difficult to determine if a firm or industry is operating efficiently when further cost reductions are right around the corner.
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Interest payments on home mortgages and home equity loans are tax deductible. This tax deductibility encourages households to
a. shift other forms of debt to their home mortgage. b. increase the equity in their house. c. make larger payments and pay down their mortgage loan more rapidly. d. decrease the overall amount of household debt in relation to household income.
When quantity demanded has increased at every price, it might be because
a. the number of buyers in the market has decreased. b. income has increased, and the good is an inferior good. c. the costs incurred by sellers producing the good have decreased. d. the price of a complementary good has decreased.