Cards (2)

  • Reasons for factor immobility:
    • Land = some land is licensed for a specific purpose and not all land is available
    • Labour = Not all workers will be trained for various things
    • Capital = Machinery all have different specific functions
    • Enterprise = Some may not have the skills to set up a business in another market
  • How does factor immobility cause market imperfection?
    Firms continue to produce goods that are not demanded > use up scarce resources unnecessarily > creating waste