Question

It has been shown empirically that efficient firms tend to export and inefficient firms tend to sell in the domestic market exclusively. Explain this with graph

Answer 1

•Efficient firms can create more measure of yield as for little sources of info whereas,inefficient firms will in general produce less measure of yield regarding input.

•In the above graph, firm working in serious market is proficient firm. It will deliver economically at a lower cost and greater amount, hence sending out the unnecessary quantity.

•On the other hand, monopolistic firm is less effective, creating less amount at a more significant expense and along these lines will in general sell in the local market solely.

•Wasteful firm produce at a which is at more significant expense Pm and lesser amount Qm and in this way selling only in the local market.On the other hand, proficient firm produce at b, at lower value Pc and bigger amount Qc. In this manner will in general fare the unreasonable amount.

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