Answer to Question #257332 in Microeconomics for Nik

Question

Distinguishe between concept of economic of scale and diseconomies of scale by taking two different business scenarios and highlight the importance of these two concepts. Identify different sources of internal and external economies of scale and diseconomies of scale in the online business? Give two three line explanation of each source.

Answer 1

Economies of scale are the minimized expenses per unit coming up because of the total output expansion. Contrary, diseconomies of scale, takes place if an output expands to greater extent as cost per unit begins to increase.

The Internal economies of scale tends to weigh the production efficiency of a firm and takes place based on aspects managed by the team. However, external economies of scale are based on big adjustments across an industry.