consumption of cheese is 6 pounds and producing zero it needs importation by 6 pounds from the United States. (Suranovic, n.d.). 2.2.1.4 Relationship Between Price and Wages The wine and cheese industries in both countries (in the US and France) are perfectly competitive. In the perfectly competitive market, the firms are free to enter and exit in the market to response the economic profit, when the firms continuously enter the market the supply of products will rise and decreasing the price of products while reduces the profit for the rest firms in the market if the firms continuously enter the market the size of economic profit decreasing to zero but when the economic profit getting negatively the firms close down and trying to find more profitable opportunity elsewhere. The reduction in the number of firms continuously leads to reduces supply on products which raises price and profit for the rest firms in the industry. (Suranovic, n.d.). The profit is total revenue minus total cost. the price of cheese is Pc, the wage of workers is , the total industry revenue is Pc Qc and the total industry cost is . (Suranovic, n.d.). We can get wage as function for everything else. The production function for cheese is plugging in above Qc or just , 2. 2.1.5 Arguments for Trade: Comparative Advantage Trade theorists have tried to explain why nations engage in international trade for more than 200 years, what kinds of goods and services they trade, and how consumers and
consumption of cheese is 6 pounds and producing zero it needs importation by 6 pounds from the United States. (Suranovic, n.d.). 2.2.1.4 Relationship Between Price and Wages The wine and cheese industries in both countries (in the US and France) are perfectly competitive. In the perfectly competitive market, the firms are free to enter and exit in the market to response the economic profit, when the firms continuously enter the market the supply of products will rise and decreasing the price of products while reduces the profit for the rest firms in the market if the firms continuously enter the market the size of economic profit decreasing to zero but when the economic profit getting negatively the firms close down and trying to find more profitable opportunity elsewhere. The reduction in the number of firms continuously leads to reduces supply on products which raises price and profit for the rest firms in the industry. (Suranovic, n.d.). The profit is total revenue minus total cost. the price of cheese is Pc, the wage of workers is , the total industry revenue is Pc Qc and the total industry cost is . (Suranovic, n.d.). We can get wage as function for everything else. The production function for cheese is plugging in above Qc or just , 2. 2.1.5 Arguments for Trade: Comparative Advantage Trade theorists have tried to explain why nations engage in international trade for more than 200 years, what kinds of goods and services they trade, and how consumers and
6527729993.docx