Diseconomy of scale

A) Explicit costs are expenses/payments that are actually made and frequently recorded. They mirror payment for a business transaction such as salaries, rent, and utilities.(OpenStax Economics, 2016). Implicit costs being intangible are not frequently recorded. This sort of cost mirrors a potential opportunity, advantages, or points of interest that may have happened in a given circumstance. (OpenStax Economics, 2016) EXAMPLES OF WHEN AN EXPLICIT COST IS DIFFERENT FROM AN IMPLICIT COST 1. Implicit

more persuasive way. This led to an increase in the effectiveness of advertising and reduced its effect upon unit cost. As research and development spending was increased Metov’s were also able to benefit from research and development economies of scale. By increasing spending in this area a number of new products were patented by Metov’s, in addition to increasing sales volume, having patents upon its products gave them a USP and competitive advantage so a higher profit margin was able to be obtained

2.2 Theoretical basis of congestion costs (diseconomies) One by-product of agglomeration is congestion, which arise as economic agents compete for limited land, limited output markets, and limited fixed public infrastructure such as highways and communication facilities. Other negative consequences of agglomeration such as environmental pollution, noise, and high crime rates may also occur. In general, congestion externalities originate from the difference between private and social costs. The literature

company better off to expand? In other words, is a bigger company a better company? The concept of economies of scale plays an important role in answering this question. Economies of scale is “the effect on average costs of production of different rates of output, per unit of time, of a given commodity, when all possible adaptations have been carried out to make production at each scale as efficient as possible” (Silberston, 1972). Consequently, the higher the output, the lower average costs per product

Q4) what are the advantages and disadvantages to a firm of operating on a large scale? Economies of scale fall under microeconomics and are the cost advantages a business obtains due to expansion. As scale is increased they cause a producers average cost per unit to fall. Microeconomics (from Greek prefix micro- meaning "small" and "economics") is a branch of economics in which you study the behaviour of how the individual firms make decisions to allocate limited resources. Normally, it applies

Introduction Drugs frequently destroy people's lives. Health issues such as disabilities, heart attacks, seizures brain damage and even death as well as behavioural problems including paranoia, aggressiveness and addiction are common and detrimental ramifications of drug abuse. England is described as the worst area in the EU for drug abuse, while Cocaine use is rising faster than in any other country while Cannabis use is among the highest too (Daily Mail, 2016). This issue of drug use is especially

In understanding pricing, costs, and profits for industries, one must understanding the following areas: demand curve, marginal analysis, stay-even analysis, marginal cost, economies of scale, learning curve, economies of scope, shift in demand, shift in supply, market equilibrium, and strategies for keeping profit from eroding. These are the critical function that every organization or industrial business needs to be successful. The upper management team needs to know and understand that concept

installed for two different grades of water. 2. Describe the method of production in your industry for a typical firm. That is, is the method of production highly capital intensive? Is it labour intensive? Does a typical firm operate on a large scale? 3 marks Water supply – regard SA Water as a typical firm Grain growing – a typical firm is a typical farm

1. Amos McCoy is currently raising corn on his 100-acre farm and earning an accounting profit of $100 per acre. However, if he raised soybeans, he could earn $200 per acre. Is he currently earning an economic profit? Why or why not? -By raising corn instead of soybeans Amos is missing out on an economic profit of $100. Therefore Amos should start growing Soybeans to maximize his profit. 2. Determine whether each of the following is an explicit cost or an implicit cost:    a) Payments for labor

With a larger scale of production companies are applying better organizational skills to its resources, such as straightforward chain of command, and by this the range where the marginal product is positive would be greatly increased. Similar to improved organization