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AGGLOMERATION ECONOMIES: A reduction in production cost the results when related firms locate near one another. Firms can be related as competitors in the same industry, by using the same inputs, or through providing output to the same demographic group. The fashion industry, for example, experiences agglomeration economies because they can share specialized inputs (photographers, models) that would be too expensive to employ full time. Retail stores have agglomeration economies when located in shopping malls because they have access to a large group of potential customers with lower advertising cost. Agglomeration economies is given as one of the primary reasons for the emergence of urban areas.
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LONG-RUN TOTAL COST The opportunity cost incurred by all of the factors of production used in the long run (when all inputs are variable) by a firm to produce a good or service, including wages paid to labor, rent paid for the land, interest paid to capital owners, and a normal profit earned by entrepreneurs. Unlike short-run total cost, long-run total cost cannot be separated into fixed cost and variable cost. In the long run, all inputs are variable, so all cost is variable.
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WHITE GULLIBON
[What's This?]
Today, you are likely to spend a great deal of time looking for the new strip mall out on the highway looking to buy either a New York Yankees baseball cap or a solid oak entertainment center. Be on the lookout for telephone calls from former employers.
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A half gallon milk jug holds about $50 in pennies.
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"So many of our dreams at first seem impossible, then they seem improbable, and then when we summon the will, they soon become inevitable." -- Christopher Reeve, Actor
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AIFT
American Institute for Foreign Trade
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