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Learning and growth economies are at the base of dynamic economies of scale, associated with the process of growth of the scale dimension and not to the dimension of scale per se. Learning by doing implies improvements in the ability to perform and promotes the introduction of incremental innovations with a progressive lowering of average costs ...
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 ...
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).
The Williamson tradeoff model is a theoretical model in the economics of industrial organization which emphasizes the tradeoff associated with horizontal mergers between gains resulting from lower costs of production and the losses associated with higher prices due to greater degree of monopoly power. [1]
The business model canvas is a strategic management template used for developing new business models and documenting existing ones. [2] [3] It offers a visual chart with elements describing a firm's or product's value proposition, [4] infrastructure, customers, and finances, [1] assisting businesses to align their activities by illustrating potential trade-offs.
The Big Push Model is a concept in development economics or welfare economics that emphasizes the fact that a firm's decision whether to industrialize or not depends on the expectation of what other firms will do. It assumes economies of scale and oligopolistic market structure. It also explains when the industrialization would happen.
Localization and Urbanization Economies are two types of external economies of scale, or agglomeration economies. External economies of scale result from an increase in the productivity of an entire industry, region, or economy due to factors outside of an individual company. There are three sources of external economies of scale: input sharing ...
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