Consider two fields: clothing and automobile production. Where would you expect more firm coordination versus market...

Consider two fields: clothing and automobile production. Where would you expect more firm coordination versus market coordination? Explain your answer.

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Expert Solution

Clothing would seemingly have more market co-ordination as opposed to automobile production which would be expected to have more firm coordination.
Automobile production involves a lot of firm activities such as R&D, etc. which is independent of market activites, and hence these would require more firm coordination from within. On the other hand, the clothing industry is one where market forces of supply and demand play a huge role, where producers and consumers are generally price takers, thus requiring a huge amount of market coordination.

Rahul Sunny answered 2 years ago

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