Abstract
Rationalization of industry is a term used to describe the changes, usually quite drastic, that are needed to correct a position of fundamental disequilibrium in an industry. The case most commonly associated with the problem is that of adjustments needed to correct overcapacity, but also involved are adjustments to correct substantial cost differences between firms arising from differences in technology or from variations in the efficiency with which a given technology is used.
This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman
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George, K.D. (1987). Rationalization of Industry. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_1751-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_1751-1
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