What role does innovation play in the industry?

The questions for each topic below can serve as guidelines for the individual paper but not all need to be discussed and not all are relevant to each industry/company. Where applicable and available, papers have to include data based information (e.g. for Topic 5 if changes in unemployment rates are discussed, those changes have to be documented). Each paper must include a statistical concept from class. References – Must be of high quality journals and books. Not to use internet sources. Topic Info – Cost (It can be helpful to take a look at Chapter 6 for this paper, book is Farnham, 3rd edition: Economics for Managers, Pearson. ISBN: 9780132773706) Discuss the cost structure of your companies (qualitatively). What are significant cost factors? How do the companies respond to potential diminishing returns? Are there economies of scale? Where do they come from? (e.g. high entry costs, high R&D costs, etc.) What role does innovation play in the industry? What have your two companies done to reduce cost over time? (E.g. degree of automation, outsourcing, productivity changes, input substitution, technological changes, etc.). Do they differ in their approach to cost reduction? Are the two companys representative of the industry as a whole in terms of cost structure?