ECN 340 Lecture : Economics of Failure

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Economics of failure y failure arises because of: basic human condition of scarcity (scarcity of means in relation to what we desire. What we want we can t get cause of the scarcity), human search for greater rewards and because of the market system (the more things that are moving quickly, the more likely people or firms are to fail. ) Some people and producers may not be able to get/keep and retain the resources they want/have. Some choices may not work out. y y pervasiveness of scarcity ensures failure. Failure causes y a release of resources that can be re-employed, and a decrease of abundant goods & services produced that can be sold at higher prices. y as some things fail, others will start and grow. Searching for greater rewards y even efficient firms should fold if more efficient firms exist. y. They have to find different lines so if one fails the move to another.