Economies of scale example

Examples of economies of scale - In the case of agriculture, for example, marx calls attention to the sophistical nature of the arguments used to justify the system of concentrated ownership of land:As for large landed property, its defenders have always sophistically identified the economic advantages offered by large-scale agriculture with large-scale landed property, as if it were not precisely as a result of the abolition of property that this advantage, for one thing, received its greatest possible extension, and, for another, only then would be of social benefit. Other common sources of economies of scale are purchasing (bulk buying of materials through long-term contracts), managerial (increasing the specialization of managers), financial (obtaining lower-interest charges when borrowing from banks and having access to a greater range of financial instruments), marketing (spreading the cost of advertising over a greater range of output in media markets), and technological (taking advantage of returns to scale in the production function). Examples of external economies of scale include:development of research and development facilities in local universities that several businesses in an area can benefit fromspending by a local authority on improving the transport network for a local town or cityrelocation of component suppliers and other support businesses close to the main centre of manufacturing are also an external cost saving. Of scale is an economic term describing a business model where the long-run average cost curve declines as production increases, or in a simple example explaining the principal, where a manufacturing company saves money as it produces higher quanties of its product, as in all business areas, 'the more you buy, the more you save'.

economies of scale

Management, technical and purchasing. See also ECONOMIES OF SCALE PART 2 on the LearnLoads YouTube Channel.