Discuss the economy of scale and dis-economy of scale, including their causes and effects.
Would be really appreciated if the answered in 5sentences thank you,
Ans:
Economy of scale occurs when there is cost advantage in the production process . It means decrease in cost with an increase in production. There are some many causes of economy of scale ; Indivisibility of fixed factors , division of labor, bargaining power of producer in the resources and raw material market, etc. These factors lead better utilization of fixed factors , specialization of labor and efficiency in production.
Dis-economy of scale occurs when there is disadvantage of cost in the production process .It means increase in cost with an increase in production.There are some many causes of dis-economy of scale ; over utilization of fixed factors, lack of co-ordination at operational level, difficulties in supervision. As a result the cost of production increases which compels the producer to produce less.
Discuss the economy of scale and dis-economy of scale, including their causes and effects. Would be...
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