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

Long run eq, The raspberry growing industry is a perfectly competitive indu...

The raspberry growing industry is a perfectly competitive industry. The firms in the industry have a U-shaped LAC, minimum average cost is $8 and the minimum efficient scale is 4 u

What is black economy, Defining black economy, If you pay your cleaner or ...

Defining black economy, If you pay your cleaner or builder in cash or for some reason neglect to tell the taxman which you were paid for a service rendered, you participate in the

Are markets the best way of solving the economic problem, Are markets the b...

Are markets the best way of solving the basic economic problem? Justify your answer. The core of the economic problem ( who, what, for whom) is something all societies must add

Differentiate between firm and industry, Differentiate between firm and ind...

Differentiate between firm and industry.   A firm is a business unit produced for the purpose of carrying out some kind of trading activity. The term "firm" is used in many ways

Market failure, causes of market failure and its solutions?

causes of market failure and its solutions?

Demand function is homogeneous of degree zero, Demand Function is Homogeneo...

Demand Function is Homogeneous of Degree Zero: Mathematical Presentation  we will show that demand function is homogeneous of degree zero in prices and money income. In o

Concepts of education and economic development - education, Normal 0 ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Explain the factors which would affect the price of a good, Explain the fac...

Explain the factors which would affect the price of a good. As there is a very long list of determinants, the basic issue is for the student to describe and illustrate how shif

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