Consider an economy consisting of traditional cottage industry with perfect competition and increasing returns to scale manufacturing industry where urban dweller's demand may be more concentrated in manufactured goods in which a minimum of workers has to be employed giving rise to a different production functions for both industries. Wage rate may significantly vary between cottage and manufacturing industry along with identical market price. How does industrialization create market failure so that public policy should initiate to swell the process of economic uplift? Even if there is homogeneity of wage rate between traditional cottage and manufacturing industries, Is there any way multiple equilibria may exist when many product sectors invest at a time. Why or why not?
Consider an economy consisting of traditional cottage industry with
increasing returns to scale manufacturing industry where urban dweller's
concentrated in manufactured goods in which a minimum of workers has to be employed giving
rise to a different production functions for both industries. Wage rate may significantly vary
between cottage and manufacturing industry along with identical market
How does industrialization create market failure so that public policy should initiate to
swell the process of economic uplift? Even if there is homogeneity of wage rate between
traditional cottage and manufacturing industries, Is there any way multiple equilibria may exist
when many product sectors invest at a time. Why or why not?
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