According to IBIS the Capital to Labor ratio in the home builders industry is 0.05 (for every $100 in labor costs, firms spend $5 on capital). The Capital to Labor ratio in the hydro-electric power industry is 0.95. From this data we can infer:

• inelastic demand in hydro-electric power but elastic demand in home building.
• high barriers to entry in the hydro-electric power industry and low barriers to entry in home building.
• the rate of learning is higher in the hydro-electric power industry than in home building.
• economies of scale in home building but dis-economies of scale in hydro-electric power generation.

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