3.3.3 - economies of scale Flashcards
1
Q
External economies of scale
A
- Occur outside of a firm but within an industry.
- The industry expands
- benefiting all firms within that industry, rather than just individual companies.
2
Q
How do you show external economies of scale on a diagram
A
3
Q
How do you show internal economies of scale on a diagram
A
4
Q
Examples and explain external economies of scale.
A
- Firms that are cocnerntared in one geographical loaction will benefit from aglomeration economies of scale (e,g Silicon Valley). They will benefit from shared resource e,g specialised labour, knowledge spilll overs and infrastructure.
- Better transportation routes and links are external economies of scale.
5
Q
Cost and benefits of external economies of scale
A
6
Q
Internalconomies of scale explain and give examples
A
R- ichards
M - um
F - lys
P - ast
T - he
M - on
7
Q
MES
A
Minimum effcient scale
