ECN 340 Lecture Notes - Economic Planning, Stock Market, Risk Management

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Ecn 340 lecture notes chapter 13 economic value of failure. Failure arises because of: basic human condition of scarcity, search for greater rewards, because of the market system. Choices have to be made, some of which will not work out. Some producers will not be able to get the necessary resources they need. Others, (firms) already in production will fail to retain the resources they do have. Choices and the necessity of allocation make failure unavoidable (a firm that has resources or can"t have sufficient resources,) As some business fail, others will start and grow. Even efficient firms should fold if more efficient firms exist. No such thing as good aboslute performance. A beautiful female can fail to attract a particular male if an even more beautiful female competes. Information is costly both in product and resources ( land, labour, and capital) market.

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