CHARACTERISTICS OF THE MARBLE INDUSTRY IN EGYPT

ABSTRACTThis paper presents a microeconomic assessment of the marble patience in Egypt. The marble fabrication is considered one of the oldest industries in the world. Historically, the sedulousness movedfrom ram-intensive to neat-intensive with the sexual climax of technological advancement,including development of automate output tools like cranes and rhomb cutting wires. InEgypt, during the past 20 years, market entry into the industry was relatively laid-back callable to the highprofit margins achieved. In addition, there was, and legato is, lack of effective governmentregulation peculiarly related to the marble stemma process from the quarries. Currently, themarble industry in Egypt could be described as that of monopolistic competition, where productsargon highly differentiated, personality of competition is capacity-constrained, and there are tangiblebarriers to entry. Moreover, barriers to entry are proper more(prenominal) tangible as the needed capitalinvest ment increased sharply with the devaluation of the Egyptian Pound. In coif to study thedynamics of the industry more thoroughly, firm-specific analysis was conducted. Results shownet ROI ( offspring on invested capital) to be 12.24% using weighted- ashen opportunity follow ofcapital considerations, and pre-tax internal valuate of return (IRR) as a direct measure ofprofitability estimated to be as high as 49.16%, while guaranteed yield using orthogonal rate ofreturn (ERR) calculations estimated at a minimum yield of 26.19%.

On the new(prenominal) hand, the coststructure in the industry shows declining long run average cost C(Q) =?Q?0.55 with increasingreturns to scale in production of 2.2 given by an estimated Cobb Douglas prod! uction functionQ(K,L) = K0.89L1.33 . The marginal rate of technical substitution betwixt labor and capitalresources was found to be the equivalent of $1000 of capital commutable by 7.5 units ofunskilled labor. In general, market segmentation is pass fantasy to arise more deeply in the futureaccording to level of applied science use by suppliers. In addition, high profitability is call tolevel off when the supply of marble quarries becomes... If you want to get a full essay, order it on our website: OrderEssay.net

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