Economics the term and the concepts development are attributed to economists john c panzar and robert d willig 1977 1981 whereas economies of scale for a firm involve reductions in the average cost cost per unit arising from increasing the scale of production for a single product type economies of scope involve lowering average cost . Economies of scope first cousins to economies of scale are economies of scope factors that make it cheaper to produce a range of products together than to produce each one of them on its own. In microeconomics economies of scale are the cost advantages that enterprises obtain due to their scale of operation typically measured by amount of output produced with cost per unit of output decreasing with increasing scale. The aim of this lesson is to present returns to scale as it is used in an economic context the lesson will provide a definition of key terms. The scope of industrial economics and its history 3 managerial economics by and large starts from the assumption that the firm aims to maximize its profits and
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