http://www.economicshelp.org/blog/concepts/economies-of-scale-examples/ Economics Blog - current events and economics essays Thu, 18 Mar 2010 19:46:30 +0000 http://wordpress.org/?v=2.9.2 hourly 1 http://www.economicshelp.org/blog/concepts/economies-of-scale-examples/comment-page-1/#comment-5650 mbalenhle Wed, 03 Mar 2010 13:02:36 +0000 http://www.economicshelp.org/blog/concepts/economies-of-scale-examples/#comment-5650 are the cost advantages that the business obtain due to expansion, the nation of increasing efficiencies of the production of good as the number of goods are the cost advantages that the business obtain due to expansion, the nation of increasing efficiencies of the production of good as the number of goods

]]> http://www.economicshelp.org/blog/concepts/economies-of-scale-examples/comment-page-1/#comment-3914 Arthur Davies Tue, 28 Jul 2009 15:58:03 +0000 http://www.economicshelp.org/blog/concepts/economies-of-scale-examples/#comment-3914 Economies of scale apply to production of goods and perhaps services where there are direct costs which are spread as volume of output rises. Risk management is not like this. Statistically an unlikely event may encourage more and larger investments in the opportunity, but this is not an economy of scale and the one in ten billion event will be catastrophic to all the investors. Protection against a once in a lifetime event would require actions and costs that would reduce the benefit to mundane levels but would require absurd levels of monitoring, surely this is not an economy of scale? Economies of scale apply to production of goods and perhaps services where there are direct costs which are spread as volume of output rises.
Risk management is not like this. Statistically an unlikely event may encourage more and larger investments in the opportunity, but this is not an economy of scale and the one in ten billion event will be catastrophic to all the investors.
Protection against a once in a lifetime event would require actions and costs that would reduce the benefit to mundane levels but would require absurd levels of monitoring, surely this is not an economy of scale?

]]> http://www.economicshelp.org/blog/concepts/economies-of-scale-examples/comment-page-1/#comment-3259 Ding Tue, 21 Apr 2009 20:54:58 +0000 http://www.economicshelp.org/blog/concepts/economies-of-scale-examples/#comment-3259 Definition: Economics of Scale is a term that is used to describe the reduction in cost-per-unit as more units are produced. For example, if a company makes 500 widgets, they cost the company 10 cents a piece to produce. Another company makes 100,000 widgets, and can therefore purchase the materials necessary to make them for much cheaper than its competitors, so each widget only costs this company 5 cents a piece to produce. Definition: Economics of Scale is a term that is used to describe the reduction in cost-per-unit as more units are produced. For example, if a company makes 500 widgets, they cost the company 10 cents a piece to produce. Another company makes 100,000 widgets, and can therefore purchase the materials necessary to make them for much cheaper than its competitors, so each widget only costs this company 5 cents a piece to produce.

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