Econ+140++Additional+Notes+for+Ch+6

Econ+140++Additional+Notes+for+Ch+6 - for Lecture Note,...

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Example of Site Specificity for Lecture Note, Page 38 Electrical power plants often locate close to a particular coal mine to minimize transaction costs of obtaining coal; the electricity is less expensive to ship than the coal.
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Example of Physical-asset Specificity for Lecture Note, Page 39 An aerosol canning company designs a filling line that can be used only for a particular firm’ product.
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Example of Dedicated Assets
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Unformatted text preview: for Lecture Note, Page 40 A computer manufacturer opens a new assembly line to enable it to produce enough computers for a large government purchase. If this assembly line is profitable only if the government purchases the firms computers, the investment is a dedicated asset. Example of Human Capital for Lecture Note, page 41 You hire an employee to operate a machine that only your company uses....
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Econ+140++Additional+Notes+for+Ch+6 - for Lecture Note,...

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