Entry, Exit, and Supply Curves: Decreasing Costs

In this video, we talk about the special case of the decreasing cost industry. As output increases, costs will continue to fall, and more firms will enter which, again, increases output. It’s a virtuous circle!
At the end of this video, we review the major points made in this section. If you find that something doesn’t quite make sense, feel free to re-watch videos as many times as you’d like.
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[@nacoran]

I tried prototyping a small gizmo (magnetic lids for harmonicas). I needed magnets for it, on a shoestring budget. The problem I had is I needed a variety of small magnets to test, and no one local supplied them. That meant I had to do mail order magnets. The problem was that I was buying $2-3 worth of magnets at a time, but the shipping and handling was $7. I really wish I lived in a city with a lot of magnet based businesses. It would have saved me a lot of money. A couple of the cities near me had heydays as strongholds for specific industries. Amsterdam, NY, was once known for it's carpets. Cheap energy from hydro, decent transportation. I'm not sure exactly what drove the industry out. Troy, NY, was known as the Collar City. They made shirt collars, but they went out of style. Schenectady, NY was one of several cities known as 'The Electric City', with a large G.E. plant. The long term problem with a specialized industry in a midsized city is that if that industry goes in a tailspin it can take the whole place with it. Even big cities like Detroit can get clobbered.

[@nothing-me1mn]

I would actually disagree that decreasing cost industries are uncommon. Isn't that the whole point behind any city? Like there's no reason for cities to form in a particular place other than along supply lines... But these supply lines are created when people cluster together, decreasing costs. Like New York is built along the ocean (for a port), but there's no reason it shouldn't be 40 miles south. But people just settled randomly, and everyone else followed suit. So civilization is kinda based on the idea of decreasing cost industries.

[@abdulrahmanalfahhad2434]

+Karl Protil I think he meant uncommon in one industry. It's highly uncommon to find 2 cities that control the industry of a good.

[@user-yt6tz5jr4m]

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