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Q. What is Marketing Economies?
They are allied with selling of the product of the firm. They arise from advertising economies. Because advertising expenses increase less than proportionately with the increase in output, advertising costs per unit of output falls as the output increases. In the same way sales promotion expenditures such as samples, salesmen force etc. also increase less than proportionately with output. Moreover a large firm can have special arrangements with exclusive dealers to sustain a good service department for the product of the firm. Therefore the average selling costs fall with increase in the size of the firm.
PROPORTIONAL TAX Is where whatever the size of income, the same rate or same percentage is charged. Examples are commodity taxes like customs, excise duties and sales tax.
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