Econ 1 - Economies of Scale

Question 1

Economies of scale

Answer 1

increase in the scale of production leads to reductions in the ATC for firms.

Question 2

Diseconomies of Scale

Answer 2

where an increase in scale production leads to an increase in ATC for firms.

Question 3

Internal Economies of scale

Answer 3

1. Financial
2. Technological
3. Marketing
4. Managerial

Question 4

Causes of Diseconomies of scale

Answer 4

1. Control - monitoring productivity.
2. Co-operation - loss of morale
3. Coordination - big businesses lose control over fixed costs