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What are the determinants of economies of scale and diseconomies of scale, respectively?

Sagot :

Diseconomies of scale occur when long run average total cost grows as output increases, while constant returns to scale occur when costs remain constant as product increases.  Economies of scale exist when long run average total cost drops as output increases.

The phenomenon known as economies of scale occurs when the scale or magnitude of the production product by a firm increases while the average cost per unit of output decreases. This is an illustration of a natural monopoly, in which there is only one effective number of businesses.

A complex product like an automobile is produced using another form of scale economies.

To learn more about Economies, click here.

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