--%>
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 : Problem on Occupational Crowding After

    After vacationing hundreds of restaurants, then a restaurant critic has concluded which in almost all the workers who clear tables and also wash dishes appear to be illegal aliens by Mexico. The critic has observed a phenomenon termed as: (1) marginalized labor. (2) t

    		•
  • Q : Illustration of Human Capital On-job

    On-job training, there a college education, as well as leadership skills is all illustrations of: (w) financial capital. (x) human capital. (y) investment. (z) economic capital. Hey friends please give your opinion for the problem

    		•
  • Q : What are the main features of

    What are the main features of managerial economics?

    		•
  • Q : Factors governing prices and pricing

    Illustrates the factors governing prices and pricing decision in briefly?

    		•
  • Q : Concept of derived demand The concept

    The concept of derived demand means that: (w) consumer demands for goods depend on the utilities received from their use. (x) firms’ demands for resources depend upon consumer demands for the goods produced. (y) governmental demands for social g

    		•
  • Q : Explain the assumptions of Law

    Explain the assumptions of Law Diminishing Returns.

    		•
  • Q : Aggregate Supplies of Labor Into the

    Into the short run, the labor supply in an economy based least on: (1) population size and labor force participation rate. (2) individuals’ preferences between leisure and income from work. (3) the demand for labor. (4) rates and structures of w

    		•
  • Q : Introduction of the term Break Even

    Give a brief introduction of the term Break Even Point. How does BEP aid in making business decision?

    		•
  • Q : Meaning of managerial economics What is

    What is the meaning of managerial economics?

    		•
  • Q : Value of the Marginal Product The value

    The value of marginal product of a variable resource is marginal physical product of it multiplied with: (w) the marginal revenue from the sale of its addition to output. (x) its cost. (y) the price of the product. (z) one.