A Report On Labor Economies

934 Words Aug 8th, 2015 4 Pages

These economies will arise as a result of employing skilled, trained, qualified and highly experienced persons by offering higher wages and salaries. As a firm expands, it can employ a large number of highly talented persons and get the benefits of specialization and division of labor. It can also impart training to existing labor force in order to raise skills, efficiency and productivity of workers. New schemes may be chalked out to speed up the work, conserve the scarce resources, economize the expenditure and save labor time. It can provide better working conditions, promotional opportunities, rest rooms, sports rooms etc, and create facilities like subsidized canteen, crèches for infants, recreations. All these measures will definitely raise the average productivity of a worker and reduce the cost per unit of output.

They arise on account of the provision of better, highly organized and cheap transport and storage facilities and their complete utilization. A large company can have its own fleet of vehicles or means of transport which are more economical than hired ones. Similarly, a firm can also have its own storage facilities which reduce cost of operations.

These economies will arise on account of large scale operations. The expenses on establishment, administration, book -keeping are more or less the same whether production is carried on small or large scale. Hence, cost per unit will…
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