Economies and diseconomies of scale, Managerial Economics

Assignment Help:

Economies and diseconomies of scale are of two types- external andinternal. Internal economies and diseconomies are those which a firm reaps as a result of its own expansion. Conversely, external economies and diseconomies are those that a firm accrues as a result of the growth of industry as a whole. They are external since they accrue to the firms from outside.

The internal economies and diseconomies of scale affect the shape of long run average cost curve. Internal economies of scale cause long run average cost to fall, whereas internal diseconomies of scale causes the long run average cost to rise as output increases.

Contrariwise external economies and diseconomies of scale affect the position of both the long run and short run average cost curves. External economies shift down the cost curve whereas external diseconomies shift up the cost curve.


Related Discussions:- Economies and diseconomies of scale

Homework, 1. What does a MNC have to consider that a domestic company does ...

1. What does a MNC have to consider that a domestic company does not, and how does this impact capital budgeting? in addition to the complications encountered in doing a capital bu

Investment demand theory , In the national income analysis, investment ref...

In the national income analysis, investment refers to the value of than part of the aggregate output for any given time period which takes the form of construction of new structure

Manegerial economics, Profit maximiZation is theoretically the most sound b...

Profit maximiZation is theoretically the most sound but practically unattainable objective of business finns. Do you agree this statement? If agree give

What is data mining, Q. What is Data mining? Data mining: Data mining...

Q. What is Data mining? Data mining: Data mining is the process of extracting patterns from data. Data mining is seen as an increasingly important tool by modern business to

Explain the no new substitutes for the commodity, No new substitutes for th...

No new substitutes for the commodity If some new substitutes for a commodity appear in the market, its demand normally declines. This is quite natural, since with the availabil

Economic benefits, Singapore Airlines  is facing the possibility of a new c...

Singapore Airlines  is facing the possibility of a new competitor " Qantas " to enter the Singaporean market, especially in premium market, Singapore Airlines is dominant on the ma

Me, In a one-shot game, if you advertise and your rival advertises, you wil...

In a one-shot game, if you advertise and your rival advertises, you will each earn RM5 million in profits. If neither of you advertises, your rival will make RM4 million and you w

How economics contributes to managerial functions, How economics contribute...

How economics contributes to managerial functions However economics is variously defined, it's basically the study of logic andtechniques and tools, to make optimum use of ava

Functions of budget, Functions of the Budget The budget fulfils three ...

Functions of the Budget The budget fulfils three main functions: To raise revenue to meet government expenditure The government of a country provides certain se

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd