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

Effect of an increase in uncertainty on dollar exchange rate, As stock mark...

As stock markets have crashed, and uncertainty has increased, consumers move their money to the safest currencies and countries in the world.  Predict the effects of an increase in

Calculate the responsiveness of consumers, The price elasticity of demand i...

The price elasticity of demand is how economists calculate the responsiveness of consumers to alters in prices for a commodity.  In other words, as price enhances (reduces), the qu

Economic planning, what are the recommendations for effective economic plan...

what are the recommendations for effective economic planning?

Compensared demand function, What are the properties of compensared demand ...

What are the properties of compensared demand function

Agriculture development, Visit to a village panchayat for agriculture base...

Visit to a village panchayat for agriculture based project

Price of lending money, Interest: A lender charges interest as the price of...

Interest: A lender charges interest as the price of lending money (or some other asset) to a borrower. Interest is mainly charged as a specified percentage of the loan's value, per

Direct utility, what is direct utility in micro economics?

what is direct utility in micro economics?

Price elasticity, Price Elasticity A measure of the change in demand fo...

Price Elasticity A measure of the change in demand for a product relative to unit changes in the price of the product. If the percentage change in quantity demanded is greater

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