8. In our discussion of labor market pooling, we stressed the advantages of having two firms in...

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8. In our discussion of labor market pooling, we stressed the advantages of having two firms in the same location: If one firm is expanding while the other is contracting, it’s to the advantage of both workers and firms that they be able to draw on a single labor pool. But it might happen that both firms want to expand or contract at the same time. Does this constitute an argument against geographical concentration? (Think through the numerical example carefully.)

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International Finance Theory And Policy

ISBN: 9781292019550

10th Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz

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