Trade liberalisation triggers a change in relative factor cost
of the two types of firms, and consequently, a change in product range produced by each of them.
The third elements factor cost
subsystem has two indicators, namely "average wage (X7) and fixed asset investment in the proportion of loans to finance (X8)".
Selecting four key international corridors in West, Central, East, and Southern Africa that connect ports of entry and exit to the hinterland, the study analyzes such factors as road network quality and coverage; factor costs
such as fuel, labor, and equipment; market economics, including regulation, companies' organization, and transport and trade procedures and their impacts on transport prices and tariffs incurred by end users; transport costs incurred by commercial transport providers; and vehicle operating costs.
When implemented effectively, companies are able to leverage industry-wide scale, harness lower factor costs
, speed technological advances, and enhance business flexibility.
This has allowed firms to take advantage of differences in factor costs
and expertise across countries.
Annually, clotting factor costs
usually are between $150,000 and $225,000 for an adult with severe hemophilia.
Real private GDP (measured at factor costs
) declined by some 30% between 1999 and mid-2002.
Because demand is diminishing and factor costs
are high, no incentive exists to make the investments needed to put the facility costs back into the second phase or certainly into the first phase.
Foreign investment decisions generally include an investigation of risk factors such as factor costs
and conditions, the country's infrastructure, political risk, market access and exchange rate.
How is the difference determined between "established prices" and adjusted factor costs
? "The ruble prices of 1937 deviate from adjusted factor cost
on various accounts, among the chief are turnover [or sales] taxes, subsidies, profit charges, which are more or less unrelated to adjusted factor cost
, and inadequate depreciation charges.
The relevance of this point is that this simple relationship, derived from a first-order condition facing the individual firm, can be re-expressed as a mark-up pricing equation, which states that price is a mark-up over unit factor costs
for any factor [Hymans 309-24].
It is based on the fact that factor costs
in one country are lower than in another.