Economies of Scale Flashcards
1
Q
Economies of Scale
A
As a firm expands, long-run average costs decrease
Also known as internal economies of scale
2
Q
Dis-economies of Scale
A
As a firm expands, long-run average costs increase
Also known as internal dis-economies of scale
3
Q
The 6 Internal Economies of Scale
A
Risk-bearing economies Managerial economies Financial economies Purchasing economies Technical economies Marketing economies
RMFPTM- Richards Mum Flies Past The Moon
4
Q
The 3 Dis-economies of Scale
A
Alienation
Bureaucracy
Communication
ABC
5
Q
External Economies of Scale
A
As an industry expands, long-run average costs for the industry decrease
6
Q
The 2 External Economies of Scale
A
Lower recruitment costs
Knowledge transfers
