Economies of Scale Flashcards
1
Q
What is risk bearing economies of scale?
A
large firms being able to increase the range of different goods & services they produce
2
Q
What is Managerial economies of scale?
A
Large Firms being able to employ more managers, leading to efficiency and productivity
3
Q
What is Financial Economies of Scale?
A
Large Firms being able to make larger loans at a reduced interest rate
4
Q
What is Purchasing Economies of Scale?
A
Large Firms being able to buy raw materials in bulk
5
Q
What is Technical Economies of Scale?
A
Large Firms being able to use tech to increase speed and accuracy of production
6
Q
What is Marketing Economies of Scale?
A
Large Firms being able to afford more effective advertising
7
Q
What is Economies of Scale?
A
As Scale of Production Rises, Average Cost of Production Falls
