Country A has a labor productivity of 40 business plans per employee per annum. The country could sell each business plan for $10,000 to country B. Each worker receives $240,000 of his/her output. All other costs are $40,000 of the productivity of labor. As competitiveness is 2. Country B has a competitiveness of .5. Increased technology induces each worker to increase his/her productivity to 50 business plans annually in A. A now can sell the plans for $500,000 per employee.
Analyze what would happen in the following cases:
a) Only the aforementioned occurs.
b) Country A raises the compensation to $300,000per employee.
c) Country A raises the compensation to $270,000, lowers the price to $9,000 per plan.
Correspond the above to trade, productivity and competitiveness. Compare and contrast the diverse cases. What happens to the profitability of counties A and B?