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Marketing Economies:
These are derived from the bulk purchasing of inputs and bulk distribution of outputs. A large firm is able to buy its raw materials in larger quantities. Such bulk purchases enable the firm to obtain discounts and free transportation. It also costs a little more to sell smaller quantities of output as sales cost per cost per unit of output sold tends to fall as the volume of sales increases. Distribution may even be taken over by subsidiary firms. As sales increases, advertising cost per unit sold reduces too. These advantages lead to a fall in per unit cost of production for the large firm.
the prevalence of excess capacity is the direct consequence of the existence of monopolistic competition
disadvantages of monopsony
Sources of external economies of scale: Economies of Skilled Labour: This involves upgrading the skills of labour through the provision of education and training faci
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Define the price ceiling A price ceiling is a highest price that sellers can charge for a product.
List four characteristics of monopolistic competition
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