Question

As an economy develops and becomes more integrated into the world economy how do its costs of production change and how well can they be managed both in the short-run and long-run?

Answer 1

When the economy devops and becomes more integrated the cost of production gets to reduce and this is because of the fact that the more technological advancement comes in on the whole with who h efficient production can be made possible all in all. In the short run, the fixed cost of production might be on a higher node while the variable costs decrease and this is due to technological investment and in the long run all the variable costs decrease and this is a sign of increase in efficiency all in all.