Returns to scale in carpet industry, Microeconomics

Assignment Help:

Returns to Scale in Carpet Industry

*  The carpet industry has grown from the small industry to large industry with some large firms.

*  Question

- Can the growth be illustrated by the presence of economies to scale?

369_us carpet industry.png

*  Are there economies of scale?

- Costs (or percent of cost)

  • Capital - 77 percent
  • Labor - 23percent

*  Large Manufacturers

- Increased in machinery and labor

- Doubling inputs has doubled output

- Economies of scale are there for large producers

*  Small Manufacturers

- Small increases in scale have no impact on output

- Proportional increases in inputs proportionally increase output
- Constant returns to scale for the small producers 


Related Discussions:- Returns to scale in carpet industry

Credit squeeze, Credit Squeeze:At times private banks become reluctant to i...

Credit Squeeze:At times private banks become reluctant to issue new credit andloans, frequently because they are worried about risk of default by borrowers. This is common at the t

Trading/ keynesian economics and supply side economists, 1) Describe (with ...

1) Describe (with an example) how trading can lead to an increase in world output if countries specialize in the good in which they have a comparative advantage. How does the intr

Diminishing marginal returns, law of diminishing marginal returns does no...

law of diminishing marginal returns does not hold then output of the world can be produced in a flower pot. Explain?

What is the difference between price value and price level, What is the dif...

What is the difference between price value and price level?  Price value is the value of commodity bought by the consumer at a certain price from the market, while, price level

Economics, What happens when oil eventually runs out?? can''t we just pay ...

What happens when oil eventually runs out?? can''t we just pay doctors and nurses more money?? The unemployed should get off their backsides and get a job??

International trade, compare and contrast adam smith''s theory of absolute ...

compare and contrast adam smith''s theory of absolute advantage theory and david ricardo''s comparative advantage theory of international trade.

Types of privatisation of the economy, Privatisation in the narrow sense ca...

Privatisation in the narrow sense can take several forms: a) Total Denationalisation: This implies complete transfer of ownership of apublic enterprise to private hands. Some

Network externalities, NETWORK EXTERNALITIES Till this point we have as...

NETWORK EXTERNALITIES Till this point we have assumed that people's demands for good are independent of each other. Actually, a person's demand can be affected by the number

What is an optimization in the methods of mathematics, What is an optimizat...

What is an optimization in the methods of mathematics of modern economics? Optimization is a basic tool for the development of modern microeconomics analysis. Many of economic

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