Economies Of Scale Flashcards
(5 cards)
1
Q
What is economies of scale
A
The cost advantage experienced by a firm when it increases its level of output
2
Q
What is technical economies of scale
A
Economies of scale achieved via technology investing in new better technology increasing production
3
Q
What is purchasing economies of scale
A
Buying in bulk from suppliers to get a discounted price on their goods and services
4
Q
What is managerial economies of scale
A
Investing in expertise and specialists as your organisation grows who can oversee and improve production systems and streamline processes
5
Q
What is financial economies of scale
A
Enables more fundable rates of borrowing firms can take more loans increasing their factors of production
