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In section 7.2 of the text, it states: “The pattern of costs varies among industries and...

In section 7.2 of the text, it states: “The pattern of costs varies among industries and even among firms in the same industry. Some businesses have high fixed costs, but low marginal costs.” Aside from the examples cited in the book, identify one industry with high fixed costs in the short run. Then, identify an industry with high marginal costs in the short run. Be sure to analyze specific examples of costs to justify your choices.

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Pharmaceutical industry has a huge fixed cost because it invests heavily in finding the balanced and medically sound chemical composition of drugs. Then there is an investment incurred on testing and approval of drugs before it is sold to the hospitals and patients. This implies that per pill cost is marginal / negligible and fixed cost is huge in the short run

Automobile industry has hugh marginal cost because in the short run machinery/robots/automation is limited so additional car can be produced at a huge additional cost. With time this cost falls as technology is improved

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