a)In your own words, state and briefly explain two reasons that lead to economies of scale....
a)In your own words, state and briefly explain two reasons that lead to economies of scale. Approximately 50 words
b)In your own words, state and briefly explain two reasons that lead to diseconomies of scale. Approximately 50 words
Homework Answers
a) Economies of scale is when the firm witness a fall in the total price when the increase the total output, this occurs for then firm due to several reasons like agglomeration of the firm in the market i.e. availability of raw material at bulk, better trained labor force and reduction in the wastage of the resources in the market.
b) Dis economies of scale occurs for the firm due to factors that increase the cost of production as they increase output and these factor that are increasing the cost are external to the firm, these include increasing wages, rise in the price of the raw materials due to limited availability and diminishing marginal return of the factors.
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a)In your own words, state and briefly explain two reasons that
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