Economies of Scale - Essay Example

Extract of sample
Economies of Scale

This concept is popularly known as 'Economies of Scale'. Many firms in different sectors of the economy are experiencing the economies of scale by virtue of expanding their economic activities to a greater level. The economies of scale may be internal or external. Internal economies of scale are experienced within the same firm while external economies of scale are experienced in the same industry. In this paper the internal economies of scale are discussed in detail in the Section-I. Subsequently disadvantages of the economies of scale for a firm as well as for the consumers of the firms experiencing economies of scale are described in the section-II and III. Finally the implications of the regulatory authorities on the concept of 'minimum efficient scale' has been described in section-IV.
If the average cost per unit of input falls per unit increase in the output, then the firm is said to be enjoying the internal economies of scale. This in other words it can be expressed as a percentage change in all inputs leads to a greater percentage change in outputs. Here average total cost (ATC) first decreases because fixed cost such as buildings, equipments and management expenses remains constant and have been utilized to their optimum. The total cost is spread over a greater range of outputs. ...Show more


The concept of small is beautiful can hardly be accepted in this globalised economy when there is fierce competition among the firms for marketing similar type of products. At that point one factor plays a key role in keeping the products moving, is its 'price'…
Author : ibalistreri
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Economies of Scale"
with a personal 20% discount.
Grab the best paper

Related Essays

International Business
Globalization relates to: a rise in free trade between various countries; a boost in the flow of labour and capital between countries; immense expansion of multi-national corporations; an all encompassing amalgamation within the global trade cycle; and, amplified infrastructural development within the communication and transport sectors, which successfully lessen the obstacles between countries (Hill 2012, p.3).
3 pages (750 words) Essay
Minimum Efficient Scale
In traditional economics, the least efficient level is defined as the lowest manufacturing point at which long-run total average costs (LRATC) are minimized. It is the output for a business in the long run where the internal economies of scale have been fully exploited such as greater than before labor supply, enhanced specialization, better technology, and innovation of new resources.
5 pages (1250 words) Essay
Economies of Scale and International Trade
According to the discussion the importance of ‘economies of scale’ especially in production on a large-scale has often been recognized in the context of international trade. Economies of scale have also had a great impact in the rapid growth of industrialization in several countries after the war.
4 pages (1000 words) Essay
SLP 4 - Strategic Choices
This will enable the firm to attain maximum competitive advantage through deliverance of maximum utility to customers with the least possible cost. From Michael’s book (1985), we must be able to balance on our use of economic, human and technological resources in order to
2 pages (500 words) Essay
Discussion question-essay
Economies of scale can be defined as the reduction in long-run average and marginal costs arising from an increase in size of an operating unit (Businessdictionary). Walt-Mart
1 pages (250 words) Coursework
International business in emerging economies
In order to progress its marketable surplus in the long run, the company must enlarge its business in the newly booming economies of the world. The political authorities of these countries
8 pages (2000 words) Assignment
Find out how much would it cost
to get a custom paper written by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email