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Economies of scale is related to and can easily be confused with the theoretical economic notion of returns to scale. Where economies of scale refer to a firm's costs, returns to scale describe the relationship between inputs and outputs in a long-run (all inputs variable) production function.
Economic sociology is an attempt by sociologists to redefine in sociological terms questions traditionally addressed by economists. It is thus also an answer to attempts by economists (such as Gary Becker ) to bring economic approaches – in particular utility maximisation and game theory – to the analysis of social situations that are not ...
If only diseconomies of scale existed, then the long-run average cost-minimizing firm size would be one worker, producing the minimal possible level of output. However, economies of scale also apply, which state that large firms can have lower per-unit costs due to buying at bulk discounts (components, insurance, real estate, advertising, etc.) and can also limit competition by buying out ...
Scope economies, or economies of scope, describe the aspect of production wherein cost savings result from the scope of an enterprise, as opposed to its scale (see economies of scale). Meaning, there are economies of scope where it is less expensive for firms to combine two or more product lines into one, than it is to produce each product ...
Also called resource cost advantage. The ability of a party (whether an individual, firm, or country) to produce a greater quantity of a good, product, or service than competitors using the same amount of resources. absorption The total demand for all final marketed goods and services by all economic agents resident in an economy, regardless of the origin of the goods and services themselves ...
In economics, the concept of returns to scale arises in the context of a firm's production function.It explains the long-run linkage of increase in output (production) relative to associated increases in the inputs (factors of production).
People looking to save money for a big trip or financial investment may want to make plans around an "extra" paycheck in their pocket.. Employees who get paid on a biweekly basis (every other week ...
There are several basic questions that must be answered in order for an economy to run satisfactorily. The scarcity problem, for example, requires answers to basic questions, such as what to produce, how to produce it and who gets what is produced. An economic system is a way of answering these basic questions and different economic systems ...