Wednesday, February 5, 2014

Why is tertiary sector activity the most profitable type?

If tertiary sector activities are the most profitable in a
given economy it is most likely because there is not enough supply relative to
demand.


Tertiary sector activities often involve creating
and selling services that can only be done by people with education or specialized
knowledge.  Examples of this would be the services sold by lawyers or business
consultants.  This sort of tertiary sector activity can only be done by a very limited
number of people.


When a product can only be produced by a
limited number of people, there will not be a great deal of competition among suppliers
of that product.  Therefore, prices will not be driven down as much as they would be if
there were more competition.


When tertiary sector
activities produce services that can only be done by a relatively few people, they are
likely to be quite profitable.

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