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Define economies of scale and give two reasons why a firm may experience economies of scale?
Economies of scale are the money firm could save, when it expands itself. For example, if firm's average cost per 1 unit is 10 at the output of 100 unit and when it expands its output to 200 unit, the average cost per 1 unit drops to 8, then the firm enjoys economies of scale. So they occur, when a percentage increases equally in all inputs leads to a greater percentage change in output. Inputs are land, labour and capital and output are the goods and services the firm produces
For the average total cost curve of a firm without economies of scale what happens to costs as output increases?
costs go down
For the average total cost curve of a firm without economies of scale what happens to cost as output increases?
costs go down
Write short notes on economies of scale and diseconomoies of scale?
Economies of scale refers to the increase in the firm's output in relation to a lesser application of factors/inputs which happen in the long run.
Which would contribute most to a firm experiencing economies of scale?
specialization of production within the firm (double check me)
Define economies of scale and give two reasons why a firm may experience economies of scale?
Economies of scale are the money firm could save, when it expands itself. For example, if firm's average cost per 1 unit is 10 at the output of 100 unit and when it expands its output to 200 unit, the average cost per 1 unit drops to 8, then the firm enjoys economies of scale. So they occur, when a percentage increases equally in all inputs leads to a greater percentage change in output. Inputs are land, labour and capital and output are the goods and services the firm produces
For the average total cost curve of a firm without economies of scale what happens to costs as output increases?
costs go down
For the average total cost curve of a firm without economies of scale what happens to cost as output increases?
costs go down
What is large firm?
large firm means when a business has expand in order to benefit from economies of scale
Write short notes on economies of scale and diseconomoies of scale?
Economies of scale refers to the increase in the firm's output in relation to a lesser application of factors/inputs which happen in the long run.
Which would contribute most to a firm experiencing economies of scale?
specialization of production within the firm (double check me)
3 Describe the benefits enjoyed by a firm engaging in large scale production?
about Economies of large scale production
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.
Difference between economics of scale and diseconomics of scale?
I assume you mean economies of scale and diseconomies of scale. Economies of scale are the benefits of lower average costs gained by a firm because it is large. Economies of scale can include things like the bulk buying of raw materials etc. Diseconomies of scale happen when a firm becomes too large for its own good and becomes inefficient, therefore resulting in higher average costs.
When a firm is experiencing dis-economies of scale long run?
average total cost is minimized
Adam smiths pin factory was an example of?
economies of scale (forces that reduce a firm's average cost as the scale of operations increases in the long-run)
For the average total cost curve of a firm without economies of scale what happen to costs as output increases?
costs go down
