Question

Describe economies of scale and diseconomies of scale.

Describe economies of scale and diseconomies of scale.

Homework Answers

Answer #1

Economies of scale in simple terms is the cost advantage that major companies look

It focuses output with less given input

The inputs can be land, labour, capital, entrepreneurship

In the long run the target is to lower the average cost

The major two categories of economies of scale are internal and external

Opposite to it is Diseconomies of scale

In this as output rises the production cost also increases

In the long run average cost increases

It is generally having cost disadvantage

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