Economics Supply And Demand Questions
There are three main types of economies of scale:
1. Internal economies of scale: These occur within a firm as it grows and expands its production. Examples include cost savings from bulk purchasing, specialization of labor, and increased efficiency in production processes.
2. External economies of scale: These arise from factors outside of a firm's control, such as industry-wide improvements in technology, infrastructure, or access to skilled labor. All firms within the industry can benefit from these economies of scale.
3. Diseconomies of scale: These occur when a firm becomes too large and experiences inefficiencies and increased costs. Examples include coordination problems, communication difficulties, and decreased employee morale.