Explain why companies that choose low-pollution technologies will find it hard to survive in a competitive industry
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.
You might also like to view...
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher
If U.S. exports are $300 billion and U.S. imports total $350 billion, which of the following is correct?
a. The U.S. has a trade surplus of $350 billion. b. The U.S. has a trade surplus of $50 billion. c. The U.S. has a trade deficit of $350 billion. d. The U.S. has a trade deficit of $50 billion.
China exports toys to the United States; in a closed economy China must have a domestic price that is ________ the world price of toys.
A. greater than B. less than C. equal to D. close to
A patent is a barrier to entry
A. that grants exclusive use of an invented product or process to the inventor. B. that only allows use of an invented product or process to other companies within the industry. C. that allows use of an invented product or process by everyone. D. that grants exclusive use of an invented product or process to the government.