Question:
Why can PC fail to reach Dynamic Efficiency?
Author: eric_galvaoAnswer:
-Dynamic Efficiency is Efficiency Improving in the Long Run - How Eager Firms are -This involves Investment and, thus Risk, so only Reward will be the incentive -In a PC Market, Firm are earning Normal Profit, so there’s not much Reward for taking such risks. This hampers Dynamic Efficiency. -If there were not fully PC, but towards that side on the Scale, then there can be. Degree of Dynamic Efficiency and Productive Inefficient. THIS is why Real Life Examples are non-existent
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