What are three types of economies of scale?

Answer 1

An example of external economies of scale is when freight trucks were invented, allowing businesses all over the world to benefit from larger scale delivery services. Since the invention of freight trucks was not something controlled by the individual companies, but they still benefitted from the invention, this is considered an external economy of scale.

Answer 2

• Economies of Concentration -- when a number of firms in the same or related industries locate close together, they are able to gain mutual advantages through better transport facilities, the training of a pool of skilled labour and supplying each other with sources of components and market outlets. This is called a 'cluster affect'

• Economies of information -- In a large industry, it is worthwhile for specialist firms and for public bodies such as universities to undetake research and to provide information, form which all firms can benefit.

• Economies of Disintegration -- there may be circumstances when vertically linked production processes can be provided more efficiently by independant specialist firms. An obvious example occurs in the case of indivisibilities. If a firm is too small to use continuously plant or machinery that can't be built on a smaller scale, it makes sense to buy supplies from an independant firm that can use the plant effieciently because it supplies a number of firms in the industry.

Answer 3

social economy

technical economy

marketing economy