@Hutchoo
You can only calculate GDP based on past economic activity, on what has already occurred.
Since the calculation of GDP is the total annual production of goods and services per year, Calculated, per quarter.
By calculating per quarter <<< It makes it a lagging indicator, because we are calculating past events.
Whereas coincident indicators would be something like stock market, advertisement, etc etc.. Things happening now, that can reflect on economic activity levels
@chrisjb,
Don't put my word on this,
but my teacher taught that, economies of scale, is the volume in which a firm must produce to cover it fixed cost and to be effectively efficient.
Say Toyota produces 200,000 cars, at a $20,000 rate per car.
Assume this is the most cost effective way of tackling car production, then every company must produce at this quantity, in order to survive in the car market. Then any firm that produces more or less than this amount, and it wouldn't be cost effective. Means cost per unit of car would go up, meaning less profits/ or no profits if in very competitive oligopoly, means bad business > Go Bust.
Having said that, my teacher is somewhat unreliable.
For the terms of barrier, I guess, what you can say, if involved in entering the markets of oligopolies and monopolies, the the economy of scale would involve large set up costs.....and if fail, could mean huge losses. Therefore many competitors shy away? << blah blah blah? (Clarify this with your teacher, our teacher just spent 2 - 3 mins on this crummy topic)
PS: anyone playing stock market for the asx, cause I am :smitten: