Internal Economies of Scale -possible advantages that a firm enjoygs when the firm increases its scale of production. -shown by a fall in the LRAC curve, movement along LRAC curve
TFARM T- Technical Economies: Division of labour and specialisation, indivisibilty of plant, principle of increased dimension F - Financial Economies (bank charges larger firm a lower interest rate.) A - Admin/Managerial Economies (hiring of professionals to specialise in diff area of work) R - Risk bearing Economies M - Marketing Economies: bulk purchases, large firms spreads its adver & promotion costs over a huge o/p leading to a lower unit of COP.
Internal DisEconomies of Scale -cost disadvantage when firms expands beyond it's minimum efficient scale (MES) of production. lead to increase in COP.
MAC
M -Complexity in Management A- Difficulty in Co-ordination C- Feeling of Alienation
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