{"id":3797,"date":"2020-03-04T06:00:45","date_gmt":"2020-03-04T06:00:45","guid":{"rendered":"https:\/\/commerceiets.com\/?p=3797"},"modified":"2020-03-04T06:00:45","modified_gmt":"2020-03-04T06:00:45","slug":"economies-and-diseconomies-of-scale","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/","title":{"rendered":"ECONOMIES AND DISECONOMIES OF SCALE"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_69_1 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/#ECONOMIES_AND_DISECONOMIES_OF_SCALE\" title=\"ECONOMIES AND DISECONOMIES OF SCALE\">ECONOMIES AND DISECONOMIES OF SCALE<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/#Economies_and_Diseconomies_of_scale_arises_due_to_law_of_returns_to_scale\" title=\"Economies and Diseconomies of scale arises due to law of returns to scale.\">Economies and Diseconomies of scale arises due to law of returns to scale.<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/#TYPES_OF_ECONOMIES_OF_SCALE\" title=\"TYPES OF ECONOMIES OF SCALE\">TYPES OF ECONOMIES OF SCALE<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/#DISECONOMIES_OF_SCALE\" title=\"DISECONOMIES OF SCALE\">DISECONOMIES OF SCALE<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 class=\"has-text-align-center wp-block-heading\" id=\"economies-and-diseconomies-of-scale\"><span class=\"ez-toc-section\" id=\"ECONOMIES_AND_DISECONOMIES_OF_SCALE\"><\/span><strong>ECONOMIES AND DISECONOMIES OF SCALE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"168\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/01\/images-6.jpg\" alt=\"ECONOMIES AND DISECONOMIES OF SCALE\" class=\"wp-image-4791\"\/><figcaption><strong>ECONOMIES AND DISECONOMIES OF SCALE<\/strong><\/figcaption><\/figure>\n\n\n\n<h6 class=\"wp-block-heading\" id=\"economies-and-diseconomies-of-scale-arises-due-to-law-of-returns-to-scale\"><span class=\"ez-toc-section\" id=\"Economies_and_Diseconomies_of_scale_arises_due_to_law_of_returns_to_scale\"><\/span><strong>Economies and Diseconomies of scale arises due to law of returns to scale.<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h6>\n\n\n\n<p>Economies of scale are defined as the cost advantages that an organization can achieve by expanding its production in the long run.<\/p>\n\n\n\n<p>In other words, these are the advantages of large scale\nproduction of the organization. The cost advantages are achieved in the form of\nlower average costs per unit.<\/p>\n\n\n\n<p>It is a long term concept. Economies of <a href=\"https:\/\/commerceiets.com\/returns-to-scale\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"scale (opens in a new tab)\">scale<\/a> are achieved when there is an increase in the sales of an organization. As a result, the savings of the organization increases, which further enables the organization to obtain raw materials in bulk. This helps the organization to enjoy discounts. These benefits are called as economies of scale.<\/p>\n\n\n\n<h3 class=\"has-text-align-left wp-block-heading\" id=\"types-of-economies-of-scale\"><span class=\"ez-toc-section\" id=\"TYPES_OF_ECONOMIES_OF_SCALE\"><\/span><strong>TYPES OF ECONOMIES OF SCALE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Economies\nof scale are of two types: <\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Internal Economies<\/li><li>External Economies<\/li><\/ul>\n\n\n\n<p>The economies of scale are further divided into two parts: Internal economies of scale and external economies of scale.<\/p>\n\n\n\n<p class=\"has-text-align-center has-green-background-color has-background has-larger-font-size\"><strong>INTERNAL ECONOMIES<\/strong><\/p>\n\n\n\n<p>Internal economies of production arise when the benefits\nor advantages of a firm\u2019s expansion are enjoyed by the firm itself.<\/p>\n\n\n\n<p>Thus, internal economies accrue only to the individual\nfirm by its own organizational ability and effort. These internal advantages\nreaped by a firm enable it to lower its average cost of production as its scale\nof production increases. These are called internal because the scale economies\nare within the control of the firm.<\/p>\n\n\n\n<p>Internal economies result from various factors. These are:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Technological economies<\/li><li>Marketing (trading) economies<\/li><li>Financial economies<\/li><li>Managerial economies<\/li><li>Risk-distribution economies<\/li><\/ul>\n\n\n\n<p><strong>(I) TECHNOLOGICAL ECONOMIES<\/strong><\/p>\n\n\n\n<p><strong>(1) Increased Specialization:<\/strong> One of the most important sources of internal economies\nis technology. Large firms can use specialized and highly efficient machinery\n(often called&nbsp;<strong>\u2018dedicated machinery\u2019<\/strong>) along with specialized\nlabour. If the production process is split into a number of various stages,\nmachines can be designed specially for each stage.<\/p>\n\n\n\n<p>That is why large scale production or mechanized\nproduction means mass production. Large firms can arrange for specialization of\nboth labour and machines. The division of labour or specialization itself can\nresult in higher productivity.<\/p>\n\n\n\n<p><strong>(2) Factor Indivisibility:<\/strong> Factor indivisibility is another source of technological\neconomies enjoyed internally by a firm. Some factors are indivisible or lumpy\nin character. These cannot be installed in fraction or in smaller units. Steel\nproduction requires installation of blast furnace having high fixed costs.<\/p>\n\n\n\n<p>If large scale operations are to be made in a steel\nfactory it should employ indivisible items. It will be grossly inefficient if\nsmall quantities of steel are produced with this blast furnace. Obviously, a\nlarge firm will then be able to achieve lower costs.<\/p>\n\n\n\n<p><strong>(3) Economies of Increased\nDimensions:<\/strong> Doubling the length, breadth,\nand the height of a cube, the surface area increases four times and the volume\nincreases eight times of the original. This simple mathematical principle is\nsuggestive of economies of increased dimensions.<\/p>\n\n\n\n<p>Large firms often reap economies of increased dimensions\nthan small firms. This results in lower costs. If the dimension of a container\nincreases, the cubic capacity increases more than proportionately. If the\ndiameter of a water-pipe is increased then the discharge of water will be\nlarger than its diameter.<\/p>\n\n\n\n<p>A double- Decker bus carries more passengers than a\nsingle-decker bus, yet no extra cost for running the bus is required. Again,\nwhen a firm doubles its sales, it is not at all needed to double its inventory\nexpenditures. This is called economies of increased dimensions.<\/p>\n\n\n\n<p><strong>(4) Principle of Multiples:<\/strong> Usually, the production process of a large firm involves\nthe use of different types of machinery having different capacities. Some of\nthem can produce small quantities while some others large quantities of output,\nthus, achieving a high utilization rate.<\/p>\n\n\n\n<p>In other words, efficient as well as optimum utilization\nof machines is possible since large firms can afford to make use of multiple\nmachines. Further, production may be multistage. For example, car component\nsuppliers remain closely linked to car manufactures. Once these are conducted\non a large scale, it becomes cost-effective.<\/p>\n\n\n\n<p><strong>(5) Use of By-Products:<\/strong> A large firm can utilize its by-product or save the\nwaste materials. A big factory like that of Tata\u2019s can use its smoke emanating\nfrom its factory site to produce articles like tar, naptha, etc. A small firm\nis always at a disadvantageous position. A large sugar factory can produce\nalcohol as a by-product.<\/p>\n\n\n\n<p><strong>(6) Research and Development:<\/strong> It is only the large firms that can conduct its own\nresearch and development (R &amp; D) programme so that newer and improved\ntechniques of production are developed.<\/p>\n\n\n\n<p><strong>(II) MARKETING (TRADING)\nECONOMIES<\/strong><\/p>\n\n\n\n<p>A large firm can reap substantial economies in the\npurchase and sale of goods and raw materials. As large firms purchase raw\nmaterials in bulk quantities, they can obtain the same at a wholesale cheaper\nprice or at favourable discounts.<\/p>\n\n\n\n<p>As far as sale or distribution of a product of a large\nfirm is concerned, it appoints expert or specialist sellers as well as\nexpensive but more cost- effective advertising. Advertisements attract more\ncustomers and, hence, lead to increased volume of sales. Further, packaging\ncosts can also be spread over bulk sales.<\/p>\n\n\n\n<p><strong>(III) FINANCIAL ECONOMIES<\/strong><\/p>\n\n\n\n<p>A large firm can secure business finance easier as it has\nhuge assets or collateral security. Because of its reputation, the shares of large\nfirms are sold easily. Again, investors enjoy greater confidence in buying\nshares, debentures and other securities of a large firm. Further, large firms\nobtain loans from banks and other agencies at favourable rates because of their\nlong-standing reputation and influence.<\/p>\n\n\n\n<p><strong>(IV) MANAGERIAL OR\nADMINISTRATIVE ECONOMIES<\/strong><\/p>\n\n\n\n<p>It is the size of large firms that enable them to use\nmore advanced and specialized management techniques. Different departments may\nenjoy specialist management personnel. Managerial economies can now be secured\nby the delegation of functions to each specialist.<\/p>\n\n\n\n<p>This is known as functional specialization or horizontal\ndivision of labour. In other words, this is really applying division of labour\nin the field of management. This will ultimately lower down management costs\nper unit of output.<\/p>\n\n\n\n<p><strong>(V) RISK-DISTRIBUTION ECONOMIES<\/strong><\/p>\n\n\n\n<p>A business always involves uncertainty and, hence, risk.\nThrough diversification of output, markets, and sources of supply, a large firm\ncan withstand any adverse conditions emanating from a particular product or\nmarket. In other words, a large firm can spread its risks and the loss in one\nmarket consequent upon a decline in demand may be offset by the gain in another\nmarket.<\/p>\n\n\n\n<p>Thus the large firms are less vulnerable to risks\ninvolved in business. A small firm is exposed to large risks since it cannot\ndistribute risks among different products or markets because of the absence of\ndiversification.<\/p>\n\n\n\n<p class=\"has-text-align-center has-green-background-color has-background has-larger-font-size\"><strong>EXTERNAL ECONOMIES<\/strong><\/p>\n\n\n\n<p>External economies arise when an increase in a firm\u2019s\nexpansion produces favourable effects on other firms. In other words, benefits\nof increased production spread on other firms in the industry or in the region.<\/p>\n\n\n\n<p>Such economies arise because the development of an\nindustry leads to the development of ancillary services or benefit to all\nfirms. Thus, external economies are available to all firms in the industry\nirrespective of their sizes. These are called external because the scale\neconomies are outside the control of the firm.<\/p>\n\n\n\n<p><strong>TYPES OF EXTERNAL ECONOMIES<\/strong><\/p>\n\n\n\n<p>External economies\ncan also be grouped into three:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Economies of concentration or\nlocalization<\/li><li>Economies of information <\/li><li>Economies of disinte\u00adgration.<\/li><\/ul>\n\n\n\n<p><strong>(I) ECONOMIES OF CONCENTRATION<\/strong><\/p>\n\n\n\n<p>It may happen that a particular area(s) often specialize\nin the production of particular products due to the availability of various\ninputs required for production. If a particular area is endowed with a variety\nof resources including infrastructure facilities, industries tend to flock in\nsuch areas.<\/p>\n\n\n\n<p>In other words, more and more industries get concentrated\nin these geographical areas leading to a decline in average costs of all firms.\nIt is said that Bangalore is the Silicon Valley of Asia as IT growth in this\npart of the country is phenomenal.<\/p>\n\n\n\n<p>The computer software firms in Bangalore share external\neconomies for their close proximity to other firms. All firms enjoy the\nbenefits of a pool of highly skilled staff, shared training programmes, better\ntransport links, etc.,<\/p>\n\n\n\n<p>External economies may also be related to a trade\nassociation which may provide trade information as well as market trends. It\nmay organize trade fair or various marketing facilities that may not be\nexploited by a single firm.<\/p>\n\n\n\n<p><strong>(II) ECONOMIES OF INFORMATION<\/strong><\/p>\n\n\n\n<p>All the firms, particularly the bigger ones, in a\ngeographical area may cooperate in the realm of research and development. The\nR&amp;D wing of a modern large firm provides valuable information relating to a\nbusiness through its trade and technical journals. Other firms benefit from the\ndissemination of information for which no direct costs are incurred by these\nfirms. Thus average costs of production tend to decline.<\/p>\n\n\n\n<p><strong>(III) ECONOMIES OF\nDISINTEGRATION<\/strong><\/p>\n\n\n\n<p>When an industry develops, many specialized firms get established specializing in particular stages of the production process. This is called disintegration which results in increased efficiency.<\/p>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"diseconomies-of-scale\"><span class=\"ez-toc-section\" id=\"DISECONOMIES_OF_SCALE\"><\/span><strong>DISECONOMIES OF SCALE<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"300\" height=\"168\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2022\/01\/images-6.jpg\" alt=\"ECONOMIES AND DISECONOMIES OF SCALE\" class=\"wp-image-4791\"\/><figcaption>ECONOMIES AND DISECONOMIES OF SCALE<\/figcaption><\/figure>\n\n\n\n<p>Economies of scale can never be unlimited. As\na result, expansion beyond a certain point will not cause average costs to\ndecline. Instead, it will rise as the firm expands. In other words, when the\nsize of a firm becomes large, possibilities for economies get exhausted and\ndiseconomies set in.<\/p>\n\n\n\n<p>There\nare four important internal causes of diseconomies of scale:<\/p>\n\n\n\n<p><strong>(A)\nTECHNICAL DISECONOMIES<\/strong><strong><\/strong><\/p>\n\n\n\n<p>The size of the firm may hurt itself.\nTechnologically, it is not wise always to use more and more complex machinery\nwhich itself is expensive.<\/p>\n\n\n\n<p><strong>(B)\nMARKETING DISECONOMIES<\/strong><strong><\/strong><\/p>\n\n\n\n<p>We know that division of labour or\nspecialization is limited by the extent of the market. If the market is narrow,\ncontinual expansion in size may not be cost-effective. Transport costs may\nshoot up if raw materials or finished products are required to be transferred\nin distant markets.<\/p>\n\n\n\n<p><strong>(C)\nFINANCIAL DISECONOMIES<\/strong><strong><\/strong><\/p>\n\n\n\n<p>Growth of large firms is often hampered due\nto financial constraint. Sometimes, it may fail to secure necessary amount of\nfinance from the market, particularly if the firm\u2019s financial credibility is\nlost or damaged. Same is true in the share market. Often a large firm fails to\nsecure necessary finances through sale of shares and debentures.<\/p>\n\n\n\n<p><strong>(D)\nMANAGERIAL DISECONOMIES<\/strong><strong><\/strong><\/p>\n\n\n\n<p>As the size of a firm increases,\nadministrative problems as well as coordinating problems may emerge due to the\ngrowth of bureaucracy or a minute division of managerial labour.<\/p>\n\n\n\n<p>In a\nlarge-sized firm, managerial functions become increasing\u00adly difficult to\nperform effectively since more and more layers of administrators and executives\nare added with the expansion in size. Here Parkinson\u2019s Second Law comes into\neffect which states:&nbsp;<strong>\u201cSubordinates multiply at a fixed rate, regardless\nof the amount of work produced.\u201d<\/strong><\/p>\n\n\n\n<p>These are internal diseconomies of large scale production. Diseconomies of scale may also be external. Because of localization of industries in a locality, there occurs the problem of traffic congestion or pollution. In view of these problems of large scale production, modern governments also support the growth of small firms. The philosophy of&nbsp;<strong>\u2018small is beautiful\u2019<\/strong>&nbsp;works<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/demand\/\">Theory of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-demand\/\">Law of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/demand-function\/\">Demand Function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/exceptions-of-law-of-demand\/\">Exceptions of law of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/\">Elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/change-in-demand\/\">Change in demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/price-elasticity-of-demand\/\">Price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-law-of-demand-and-elasticity-of-demand\/\">Law of demand Vs Elasticity of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/factors-affecting-price-elasticity-of-demand\/\">Factors affecting price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/production-function\/\">Production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-short-run-long-run-production-function\/\">Short run vs long run production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-variable-proportions\/\">Law of variable proportions<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/types-of-demand\/\">Types of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/managerial-economics\/\">Managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/characteristics-of-managerial-economics\/\">Characteristics of managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-managerial-economics\/\">Scope of managerial economics<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/utility-analysis\/\">Utility analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-marginal-utility\/\">Law of diminishing marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-equi-marginal-utility\/\">Law of equi marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium\/\">Consumers Equilibrium<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/indifference-curve-analysis\/\">Indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve-analysis\/\">Consumer equilibrium using indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/\">Relationship between TP, AP and MP<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-increasing-returns\/\">Law of increasing returns<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-returns\/\">Law of diminishing returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-constant-returns\/\">Law of constant returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/returns-to-scale\/\">Returns to Scale<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/\">Economies and diseconomies of scale<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/concept-of-costs\/\">Concept of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-ac-and-mc\/\">Relationship between AC and MC<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/traditional-theory-of-cost\/\">Traditional theory of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/modern-theory-of-cost\/\">Modern theory of costs<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explicit-vs-implicit-costs\/\">Explicit vs Implicit costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue\/\">Revenue<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-competition\/\">Perfect competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-meaning\/\">Monopoly<\/a>&nbsp;<\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/price-discrimination\/\">Price discrimination<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-and-monopoly\/\">Difference between perfect competition and monopoly<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/\">Perfect Vs Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-and-monopolistic-competition\/\">Monopoly and monopolistic competition<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/product-differentiation-strategy\/\">Product differentiation strategy<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopolistic-competition\/\">Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/national-income-in-india\/\">National Income in India<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/measurement-of-national-income\/\">Measurement of national income in India<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/consumption-function\/\">Consumption function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/keynesian-psychological-law-of-consumption\/\">Keynes Psychological law of consumption<\/a><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"266\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg\" alt=\"ECONOMIES AND DISECONOMIES OF SCALE\" class=\"wp-image-787\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-300x78.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-768x199.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1536x398.jpg 1536w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize.jpg 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption>ECONOMIES AND DISECONOMIES OF SCALE<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>ECONOMIES AND DISECONOMIES OF SCALE Economies and Diseconomies of scale arises due to law of returns to scale. Economies of scale are defined as the cost advantages that an organization can achieve by expanding its production in the long run. In other words, these are the advantages of large scale production of the organization. The&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;ECONOMIES AND DISECONOMIES OF SCALE&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":3798,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[113,92],"tags":[],"class_list":["post-3797","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-managerial-economics","category-micro-economics"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3797"}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=3797"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/3797\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/3798"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=3797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=3797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=3797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}