Internal and External Economies of Scale

Question 1

What are the different types of internal economies of scale?

Answer 1

1. Purchasing
2. Technological
3. Managerial
4. Marketing
5. Network
6. Financial

Question 2

What are the different types of external economies of scale?

Answer 2

1. Research and Development
2. infrastructural projects
3. Agglomeration economies of scale

Question 3

What is economies of scope?

Answer 3

1. Hypermarkets (e.g. walmart)
2. Amazon
3. Proctor
   People who sell basically everything.

Question 4

What is purchasing economies of scale?

Answer 4

where buying in greater quantities usually results in a lower price (bulk buying)

Question 5

What is Technological economies of scale?

Answer 5

Use of specialist equipment/processes to boost productivity.

Question 6

What is managerial economies of scale?

Answer 6

Use of specialist managers in order to help boost unit costs and increase efficiency.

Question 7

What is marketing economies of scale?

Answer 7

Spreading a fixed marketing spend over a larger range of products, markets and customers.

Question 8

What is Networking economies of scale?

Answer 8

Adding extra customers or users to a network that is already established (e.g. mobile phones)

Question 9

What is Financial economies of scale?

Answer 9

Larger firms benefit from access to more and cheaper finance.

Question 10

What is Agglomeration economies of scale?

Answer 10

1. a shared skilled labor pool.
2. suppliers support industries.
   e.g. london