Competitive Advantage Goes to the Firm That Achieves the Largest

question 118

Essay

Competitive advantage goes to the firm that achieves the largest economic value created.Elaborate on this statement.

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Definitions:

Marginal External Cost

The additional cost incurred by society due to one more unit of a good or service being produced, that is not accounted for by the producer.

External Cost

A cost of a transaction that affects someone who is not directly involved in the transaction.

Profit Maximizing

A strategy or point at which a firm decides the price and output level that leads to the maximum profit.

MSB Curve

The Marginal Social Benefit curve, showing the extra benefit to society of producing one more unit of a good.