Define & explain the following in economic terms: 1)Economies of Scale/Minimum Efficient Scale 2)How luck (or...

Question

Question

Define & explain the following in economic terms:

1)Economies of Scale/Minimum Efficient Scale

2)How luck (or randomness, or industry instability) can lead to concentrated market structure

Answer 1

Answer #1

1.

As the production of a firm or company becomes efficient it recieves cost advantages known as economies of scale .
Economies of scale can be realized by increasing production while reducing costs.
It can be internal or external. If it is based on management decisions then we call it internal economies of scale, and if it is because of outside factors, then we call it external.
Economies of scale represent larger businesses' cost-savings as well as competitive advantages.
On the other hand, the minimum efficient scale is the lowest point on a cost curve where production can be attained at a competitive price.
It is the point where economies of scale can be achieved being prerequisite so as to compete effectively within a particular industry.
We can also say that the minimum efficient scale is the lowest point where long run average costs are minimized by a firm or a company while being in the production (business).

Answer 2

Similar Homework Help Questions

Define economies of scale, minimum efficient scale, and diseconomies of scale. Sketch a long- run average...

Define economies of scale, minimum efficient scale, and diseconomies of scale. Sketch a long- run average cost curve and indicate/label which part of the curve represents each of these three definitions.
Define ‘economies of scope’ and ‘economies of scale’. Discuss how they are similar. Discuss how they...

Define ‘economies of scope’ and ‘economies of scale’. Discuss how they are similar. Discuss how they differ. Explain how either could be used to sustain positive economic profits (up to and including a monopolistic position).
3. Under Internal Scale Economies and Monopolistic Competition, explain how International Trade can improve economic efficiency...

3. Under Internal Scale Economies and Monopolistic Competition, explain how International Trade can improve economic efficiency within an industry by changing the types of firms in the industry. (2 points)

3 to 5 sentances each 1. Distinguish economies and diseconomies of scale. How can the extent...

3 to 5 sentances each 1. Distinguish economies and diseconomies of scale. How can the extent to which economies and one scale explain the size and number of real world firms in an industry? 2. Distinguish the short run from the long run Generally, what causes costs of production to vary with output in the short ruan? What generally causes costs of production to vary in the long run? 3. What is the difference between economic and accounting profit? Why...
History of world economies 1. Briefly define two (2) of the following terms and indicate their...

History of world economies 1. Briefly define two (2) of the following terms and indicate their historic importance with respect to country, regional or global experiences in the 20th or 219 century. [16 marks) (a) The BRIC countries; (b) The second world; (c) Economic nationalism; (d) The Washington Consensus; (e) Mortgage-backed securities; (f) The permit raj;
1) What is internal economies of scale? And why would it be a source of trade?...

1) What is internal economies of scale? And why would it be a source of trade? What are the gains of trade in the presence of internal economies of scale? 2) Using graph please explain how performance differences in an industry with internal economies of scale creates winners and losers after trade? Explain step by step.

1. How does the economies of scope concept differ from the economies of scale concept? 2....

1. How does the economies of scope concept differ from the economies of scale concept? 2. Related diversification causes bureaucratic costs to increase more than unrelated diversification. Explain why that is the case.
1. Explain how transportation costs and internal economies of scale help determine firm location decisions? 2....

1. Explain how transportation costs and internal economies of scale help determine firm location decisions? 2. What are industrial policies? Present the pros and cons of industrial policies.
1. Compare and contrast the economies of scale vs the diseconomies of scale. Explain 2. What...

1. Compare and contrast the economies of scale vs the diseconomies of scale. Explain 2. What is a bottleneck in a service provider? Elaborate your answer with an example in a service provider company. 3. List the methods to overcome the imbalance capacity in a manufacturing system.

History of world economies both terms in one group 2. For two (2) of the following...

History of world economies both terms in one group 2. For two (2) of the following pairs of terms, briefly define each term then explain how the two terms are related to each other and/or to an issue from the interwar or the post WWII era (the relationship will account for one-third of your grade). 124 marks (a) Collectivization and the Soviet 5-year plans, (b) War economics and the welfare state: (c) The Marshall Plan and the International Bank for...