--%>
Assignment Help - homework help

Explain the external economies of scale

Explain the external economies of scale.

E

Expert

Verified

External or pecuniary economies to huge size firms occur from the discounts available to this because of:

1. Huge scale purchase of raw materials

2. Huge scale acquisition of external finance at low interest

3. Lower advertising rate at fun advertising media.

4. Concessional transport charge upon bulk transport.

5. Lower wage rates when a large scale firm is monopolistic employer of exact type of specialized labour.

Therefore External economies of scale are strictly based upon experience of large –scale firms or well managed minute scale firms. Economies of scale will not carry on forever. Expansion within the size of the firms beyond a exact limit, so much specialization, inefficient supervision, offensive labour relations etc will go ahead to diseconomies of scale.

   Related Questions in Managerial Economics

  • Q : Huge parts of the enormous incomes

    Huge parts of the enormous incomes earned through some gifted athletes and performers are pure economic: (w) wages. (x) profits. (y) interest. (z) rents. Hello guys I want your advice. Please recom

    		•
  • Q : Explain Exceptional Demand Curve

    Explain Exceptional Demand Curve.

    		•
  • Q : Production of food-and-clothing economy

    In an entirely employed food-and-clothing economy, continual equivalent reductions in food output generally will make it: (1) Essential to decrease clothing output uniformly. (2) Probable to generate successively bigger increases in clothing output. (

    		•
  • Q : Explain the accounting cost concept in

    Explain the accounting cost concept in brief.

    		•
  • Q : Marginal revenue productivity When the

    When the marginal revenue product of the last worker hired is superior to the marginal resource cost of the worker, in that case the firm: (w) is experiencing increasing returns to scale. (x) can increase its profits by hiring more la

    		•
  • Q : The Income Effect by Supply of Labor

    Along a supply curve for an individual’s labor, there the income effect tends to rise the: (1) supply of work as wages reduce the number of people a firm will hire. (2) demand for leisure as the wage rate and income raise. (3) l

    		•
  • Q : Increases in orders for new capital A

    A change in a derived demand is best demonstrated while there are increases in: (1) sales of roasted peanuts during baseball season. (2) new car sales during economic downturns. (3) orders for new capital throughout economic booms. (4) beef prices when cowboys unioniz

    		•
  • Q : Extension/contraction and shift in

    Differentiate between extension/contraction and shift in demand?

    		•
  • Q : Illustrates the case of customary

    Illustrates the case of customary pricing with details?

    		•
  • Q : Linear supply curves and elasticity

    Along two supply curves which are straight lines by the origin, the price elasticity of supply as: (w) is below 1 for all prices and quantities upon both curves. (x) is less for a given quantity beside the steeper curve. (y) equals on

    		•