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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 ...
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 ...
For example, if there are increasing returns to scale in some range of output levels, but the firm is so big in one or more input markets that increasing its purchases of an input drives up the input's per-unit cost, then the firm could have diseconomies of scale in that range of output levels.
An example of this is increasing production capacity to broaden product lines, therefore deterring following firms to enter and successfully make profits. This strategy is often used by Inditex with their fashion retail supply. [3] When economies of scale are large, first-mover advantages are typically enhanced.
In May 2012 the scale of Greek capital flight in the wake of the first "undecided" legislative election was estimated at €4 billion a week. [36] Capital flight can cause liquidity crises in directly affected countries and can cause related difficulties in other countries involved in international commerce such as shipping and finance. Asset ...
Benefits of horizontal integration to both the firm and society may include economies of scale and economies of scope. For the firm, horizontal integration may provide a strengthened presence in the reference market. [5] This means that with the merger, two firms would then be able to produce more revenue than one firm alone.
The uptick in activity was largely driven by the services sector. The services component of S&P's report showed the index registered 57 this month, up from 55 in October and the highest level in ...
Example: Standard Oil (1870–1911)Under monopoly, monopoly firms can obtain excess profits through differential prices. According to the degree of price difference, price discrimination can be divided into three levels. [11] Natural monopoly, a monopoly in which economies of scale cause efficiency to increase continuously with the size of the ...