Answer to Question #112111 in Microeconomics for Fini

Question

Using a diagram explain how economies of scale could help proton to compete with honda in terms of pricing

Answer 1

At first, we need to know Proton.

PROTON Holdings Berhad (PHB; informally Proton) is a Malaysian automotive company and automobile corporation active in automobile design, manufacturing, distribution and sales. Proton was established in 1983 as Malaysia's sole national badged car company until the advent of Perodua in 1993. The company is headquartered in Shah Alam, Selangor, and operates additional facilities in other cities. 'Proton' is a Bahasa Malaysia acronym for Perusahaan Otomobil Nasional (National Automobile Company).

Proton was originally a manufacturer of redadged Mitsubisi Motors (MMC) products in the 1980s and 1990s. Proton produced its first indigenously designed (though Mitsubishi-engined), non-badge engineered car in the year 2000, and elevated Malaysia as the 11th country in the world with the capability to design cars from the ground up. Since the 2000s, Proton has produced a mix of locally engineered and badge engineered vehicles. Proton cars are currently sold in at least 15 countries, the majority of which are in Asia.

Honda Motor Co. is an international industrial company, a leading Japanese motorcycle manufacturer, is also among the top then among car manufacturers in the world.

Collaboration of these companies will reduce the cost of costs for new scientific developments, as they can be carried out jointly and used by each company.

When reducing the cost of production per unit of production, it becomes possible to reduce the selling price. What gives a price advantage over competitors.