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Infrastructure (Ex: Access to educated workforce/available roads etc.) It is simply the factors which a firm does not have a control over but that can make a firm more efficient. Roads can reduce transportation costs meaning that the firm is more efficient.
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What are the sources of economies of scale?
The economies of scale attainable from large scale production fall into two categories. Internal and External.
What is internal economy of scale?
The difference between internal economy of scale and external economy of scale is that internal economies of scale come from within the business ; external economies come from or affect the world outside the business.
What are the differences between internal and external economies of scale?
AnswerEconomies of scal occurs when there is an increase in output as cost decreases. This means, as a company will have a better chance to decrease its costs. There are two ways of achieving this, internal and external economies of scale. Internal economies of scale occurs due to the change in size of an individual firm and are not dependant on the industry as a whole. This can be achieved in two ways. 1) Firm level 2) Plant level.External economies of scale occurs due to a growth in the industry as a whole. The individual firms need not grow, however the entire industry around them does.
What is economic of sales?
Economies of scale are factors which cause the average cost of production to decrease as the volume of its output is increased. It has two types: the internal and external factors.
What is the economies of scale?
Internal economies of scale arise when the cost per unit
What are the sources of economies of scale?
The economies of scale attainable from large scale production fall into two categories. Internal and External.
What is internal economy of scale?
The difference between internal economy of scale and external economy of scale is that internal economies of scale come from within the business ; external economies come from or affect the world outside the business.
What are the methods of external growth in a business?
Economies of Scale, look it up!
Of what significance is economies of scale in planning the establishment of commercial enterprise?
OF WHAT SIGNIFICANCE IS ECONOMIES OF SCALE IN THE ESTABLISHMENT OF COMMERCIAL ENTERPRISE?. economies of scale
What are the differences between internal and external economies of scale?
AnswerEconomies of scal occurs when there is an increase in output as cost decreases. This means, as a company will have a better chance to decrease its costs. There are two ways of achieving this, internal and external economies of scale. Internal economies of scale occurs due to the change in size of an individual firm and are not dependant on the industry as a whole. This can be achieved in two ways. 1) Firm level 2) Plant level.External economies of scale occurs due to a growth in the industry as a whole. The individual firms need not grow, however the entire industry around them does.
What is economic of sales?
Economies of scale are factors which cause the average cost of production to decrease as the volume of its output is increased. It has two types: the internal and external factors.
What is the economies of scale?
Internal economies of scale arise when the cost per unit
Define economies of scale How does this relate to returns to scale Cite and briefly discuss the main determinants of economies of scale?
Cite and briefly discuss the main determinants of economies of scale.
Equilibrium and economies scale in market economy?
Equilibrium and economies scale in market economy
What does the writer mean by diseconomies of sale?
Not profiting from economies of scale, because there are no economies of scale. That is meant by diseconomies of scale.
What are external economies?
Internal economies of scale arise when firms increase their scale of production. Hence, they incur lower average costs of production, either through specialization or other factors. When average costs fall, giving the price of the good to be constant, profit margins of these firms will be increased. Thus, the individual firm benefits from internal economies of scale. External economies of scale arise when all firms in an industry experience decreasing average costs of production, which can be due to economies of concentration, information and disintegration. Unlike internal economies of scale, external economies of scales independent on the size of the individual firms in the industry as both small and large firms benefit from it. Secondly, internal and external economies of scale depend on several factors. Internal economies of scale arise due to technical economies, which states that as a firm increases its scale of production, it is able to delegate specific jobs to its workers. Hence, through specialization in a single job, the workers are able to improve their productivity through attaining higher levels of dexterity and skill through repeated practices. Thus when productivity per worker rises, the firm is actually producing a greater amount of goods and hence, the average cost of the good falls. Of course, internal economies of scale also depend on other factors, such as marketing economies, which basically states that a firm making bulk purchases on raw materials would be able to enjoy cheaper prices, such as financial economies, which states that as a firm increases its scale of production and need funds to buy more factors of production, it can get it from a bank at lower interest rates. This is because its larger assets and greater selling potential provides banks with greater security. And there are also less important factors such as risk bearing and managerial economies. External economies on the other hand, depend on mainly three different economies. As mentioned above, economies of concentration states that when firms in an industry are located close together, they can enjoy the pool of skilled workers and infrastructure provided by local colleges and the government respectively. Hence, through the provision of such valuable manpower and infrastructure, firms are able to attain lower average costs of production by employing these skilled workers with high productivity, or using the efficient road and communications networks to reduce transport and managerial costs.
What is the importance of economies of scale?
no
