One of the jobs of a firm is to transform "inputs" of labor and capital into "outputs" of product and service. For most of us, that means using money to buy equipment and paying labor to produce clean garments.
If the prices of labor or technology change, new production methods may be needed to reduce unit costs. Unfortunately, the industry isn’t lucrative enough to support more R&D, but it can take advantage of other industries’ “knowledge leaks” and adapt their innovations.
