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NAME-BHOITE GEETANJALI

KESHAVRAO
CLASS-MCOM-1 (A)
SUB- INDUSTRIAL ECONOMICS
ROLL NO-7849
TOPIC-LIMITATIONS OF INDUSRIAL
ECONOMICS

IntroductionEconomy is the branch of science which deals


with scarcity. it gives an idea about how to
reconcile between unlimited wants and limited
resources having alternative uses.
The subject matter of economics has been
divided into two branches viz. micro and macro
economics. Industrial economics is considered
as a development of micro economics.

MeaningIndustrial economics is that branch of micro


economics which studies the economic problems
of firms and industries and their relationship with
the society as a whole.
Industrial economics is that branch of goods
and services which is related to the government,
producers, consumers, workers, etc.

Definitions:1-P.R. ferguson and G.J. fergusonIndustrial Economics is best defined as the


application of micro economic theory to the
analysis of firms. Markets and industries.

2-brigham and Pappas The application of economic theory and


methodology to business administration and
practice

3 HansonIndustrial economics is a term for economic


analysis as applied to industry.

4 Richard schmalensee and George stiglerIndustrial economics is the study of the


economy, particularly those markets in which
business firms are sellers.

Limitations of Industrial Economics1-dependence


2-fear of Depression
3-Social Problem
4-Restricted type of Employment
5-Diseconomies
6-Regional Imbalance
7-Lack of mobility of Workers
8-Danger of attack

1.Dependence
When an industrial is located in a particular locality, it
makes the economy dependent for its requirements of the
products manufactured. such dependence is dangerous
in the event of war, depression or natural calamities.

2.Fear of DepressionWhen several enterprises concentrates at one place


the quantity of production increases. It is not always
possible to sell the entire quantity of goods produced.

3.social problemIndustrial economics creates many social problems such


as congestion, emergence of slum areas accidents, strikes
etc. all this adversely affects the efficiency of labour and
the productive capacity of the industry.

4.Restricted type of EmploymentEmployment opportunities are limited to a particular type


labour. In the event of recession in that industry
specialised labour fails to get alternative employment
elsewhere. Employment to pay higher wages which may
raise the cost of production and adversely affects the
industry.

5.DiseconomiesEconomies of scale may at times give way to


diseconomies of scale. For example, there may lay
occurrence of power break down. The financial stringency
demands for high wages leading to rise in cost of
production. All this reduces production.

6.Regional ImbalanceConcentration of industries in one region to lop sided


development of the economy. when one industry is
localized in a region it attacts more entrepreneurs who
establish other industries there due to proper
infrastructural facilities to establish other industries.

7.Lack of mobility of workersWhen workers get jobs at one place, their willingness to
move to another place is restricted, since they are skilled
in only one type of job which may not be available at
other places.

8.Danger of AttackWar attacks are generally made at those places which are
industrially rich. This leads to economic loss.

THANK YOU

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