Ch 17 Economies and Diseconomies of scale Flashcards
1
Q
What is economies of scale?
A
Falling average prices costs due to expansion
2
Q
What is diseconomies of scale?
A
rising average costs when a firm becomes too big
3
Q
What is internal economies of scale?
A
Costs benefits that an individual firm can enjoy when it expands
4
Q
What are the different types of external economies of scale?
A
-Skilled labour
-Infrastructure
-Access to suppliers
-Similar businesses in the area
5
Q
What are the different types of diseconomies of scale
A
-Bureaucracy
-Communication problems
-Lack of control
-Distance between senior staff and shop floor workers
6
Q
What is the external economies of scale?
A
Cost benefits that all firms in an industry can enjoy when the industry expands
