The entry of new firms into the cable television industry might, for example, enable lower cost of using communication satellites. This could be because a key resource is able to take advantage of economies of scale or decreasing average cost in it is own production and supply. The primary reason for a decreasing-cost industry is that an increase in demand triggers lower production cost and a downward shift of the long-run average cost curve as new firms entering the industry force down the prices of key resources. A decreasing-cost industry occurs because the entry of new firms, prompted by an increase in demand, causes the long-run average cost curve of each firm to shift downward, which decreases the minimum efficient scale of production. This hierarchy of needs has been used to help explain the progress of human societies from agrarian to manufacturing to service to information.ĭECREASING-COST INDUSTRY: A perfectly competitive industry with a negatively-sloped long-run industry supply curve that results because expansion of the industry causes lower production cost and resource prices. These alternative needs are layered in a hierarchial pattern with physiological needs on the bottom, safety needs on the second layer, belonging needs on the third layer, esteem needs on the fourth layer, and self-actualization needs at the top. HIERARCHY OF NEEDS: Developed by Abraham Maslow, the notion that people are motivated to satisfy basic physiological needs (food, shelter, etc.) before moving on to satisfying higher psychological needs (security, companionship, etc.). AmosWEB means Economics with a Touch of Whimsy!
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