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Context:

Delegation informed prime Minister that textile sector is working at fullest capacity due to government policies. They further said the energy package, timely refunds and other facilities had resolved different issues faced by the exporters and the business community. They also aimed that textile exports will reach to Rs.21 Billion from Rs.13 Billion next year. Further, delegation told that textile sector required 100,000 more workers. Prime Minister directed ministers to resolve the energy issues and to take measures for skilled workers in the shape of training etc. Prime Minister is also hopeful to make textile products more competitive in other countries by reducing electricity tariffs.

Main Question:

Being a student of economics you are required to express how government policies will impact the average cost of the firms in the long run? Also mention what type of economies will be attained by firms if training is provided to workers by government.

My Thoughts:

I believe that the firms will face economies of scale however I'm confused whether the average cost of the firms in the long run be constant or will it still be lowered due to more skilled workers provision and other government policies. Other suggestions highly appreciated.

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