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Innovation, markets and industrial change
How does a firm emerge as ‘leader of the pack’? Why do most of the small firms so...
How does a firm emerge as ‘leader of the pack’? Why do most of the small firms so common in the early years of new industries disappear? This unit looks at how and why change occurs through the industry life cycle, at the role of innnovation and at how production costs, demand and technology interact to shape industrial structure.
After studying this unit you should be able to:
- appreciate the importance of technological change, costs of production and consumer preferences to the changing organisation of production;
- understand the relation between the quantity demanded of a good and its price as represented by the demand curve;
- understand economic models of the relation between firms’ costs and output;
- analyse the role of technology and costs in influencing industry structure over the life cycle.
- Current section: Introduction
- Learning outcomes
- 1 Technological change, demand and costs
- 2 Market demand
- 3 Firms, costs and technology
- 4 Technological change and industrial structure
- 4.1 Introduction
- 4.2 The industry life cycle
- 4.3 Industrial dynamics: knowledge and network industries
- 5 Conclusion
- 6 Questions for review and discussion
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Innovation, markets and industrial change
This unit looks at the role of innovation in the development of industries and considers how production costs change as sales increase and as new technology is introduced into the production process. It looks at the relation between consumer demand for a good and that good's price, and at how the relation between output and production costs in different markets can dramatically affect industry structure. In describing these issues, the unit introduces the range of activities that constitutes economics: formulating theories, modelling, debate and persuasion, analysis of data, understanding the behaviour of economic institutions such as companies and households, and analysing economic processes. It also seeks to show how all of these economic techniques can be used to build up a rich understanding of innovation and economic change.
This material is from our archive and is an adapted extract from DD202 Economics and economic change, which is no longer taught by The Open University. If you want to study formally with us, you may wish to explore other courses we offer in this.
This is an extract from an Open University course which is no longer available to new students. If you found this interesting you could explore more free Sociology courses or view the range of currently available OU Sociology courses.
Copyright & revisions
Originally published: Tuesday, 4th February 2014
Last updated on: Tuesday, 4th February 2014
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