Economies Of Scale
Economies
of scale is the cost advantage that arises with increased output of a
product. Economies of scale arise because of the inverse relationship
between the quantity produced and per-unit fixed costs; i.e. the greater
the quantity of a good produced, the lower the per-unit fixed cost
because these costs are spread out over a larger number of goods.
Economies of scale may also reduce variable costs per unit because of
operational efficiencies and synergies. Economies of scale can be
classified into two main types: Internal – arising from within the
company; and External – arising from extraneous factors such as industry
size.
Breaking It Down:
“Economies
of scale” is a simple concept that can be demonstrated through an
example. Assume you are a small business owner and are considering...
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viernes, 22 de abril de 2016
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