Suppose in a Purely Competitive Market That American Firms Consider

question 54

Essay

Suppose in a purely competitive market that American firms consider labor costs to be mostly variable while Japanese firms consider labor costs to be mostly fixed. What implication would this have for the viability of firms in each country if they compete with one another in the short run? What about the long run?

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Definitions:

Education Fund

A savings or investment account set aside for the purpose of funding educational expenses.

Compounded Semi-annually

The process of calculating interest on both the initial principal and the accumulated interest of previous periods of a deposit or loan on a twice-a-year basis.

Monthly Payments

Payments required to be made every month, often in the context of loan repayments, utility bills, or subscription services.

Mortgage Loan

A specific type of loan secured by real property through the use of a mortgage note which evidences the existence of the loan and the encumbrance of that realty.