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| | Returns to scale - Wikipedia, the free encyclopedia |
 | | Network externalities resemble economies of scale, but they are not considered such because they are a function of the number of users of a good or service in an industry, not of the production efficiency within a business. | | | If costs increase proportionately, there are no economies of scale, if costs increase by a greater amount, there are diseconomies of scale, if costs increase by a lesser amount, there are (positive) economies of scale. | | | Typically, because there are fixed costs of production, economies of scale are initially increasing, and as volume of production increases, eventually diminishing, which produces the standard U-shaped cost curve of economic theory. |
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http://en.wikipedia.org/wiki/Economies_of_scale
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| | Techdirt:VoIP's Negative Economies of Scale |
| | The term 'economies of scale' refers to the reduction in the cost per unit as production of a unit or the provision of a service decreases. | | | Economies of scale (negative or positive) relate to costs not revenues. | | | Diseconomies of scale is the opposite: the cost per unit increases. |
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http://www.techdirt.com/articles/20051007/1552235_F.shtml
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| | Economies of scale |
| | As an industry grows other businesses start up in support of them increasing competition and their own economies of scale mean they can sell components and services at lower unit cost to the industry. | | | The larger the quantity purchased the bigger the percentage discount is. The office work needed for a big order is the same as that for a small order. | | | They are usually listed under two broad headings; Internal economies and external economies. |
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http://www.cr1.dircon.co.uk/TB/3/Econsofscale.htm
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| | JTEP ECONOMIES OF SCALE AND SCOPE |
| | A method is presented to decide how to calculate the degree of scale economies from estimated transport cost functions which include aggregate outputs as arguments. | | | It is commonly agreed that the relationship between toll revenue and capacity cost under marginal cost pricing depends on scale economies. | | | The author, using a general translog cost function, finds that there are economies of scale in bus transport in |
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http://www.jtep.org/archive/economic_themes_pt_2-18.htm
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| | Regional Economist |
| | To the extent that there is agreement, however, the consensus is that economies of scale exist for the smallest banks; average costs are minimized in an asset range somewhere between $75 million and $300 million.1 | | | The change in the number of banks also supports the assertion that economies of scale exist at small banks. | | | This means that banks with assets of $300 million or more appear to have a cost advantage over smaller banks, calling into question the long-run viability of small banks. |
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http://www.stlouisfed.org/publications/re/1999/d/re1999d3a.html
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| | Economies of Scale? |
| | A good forest economy would therefore be a local economy, and the forest economy of a state or region would therefore be a decentralized economy. | | | This would not only be kinder to the forest but would also be another way of elaborating the economy locally, requiring lower investment and less spending outside the community. | | | A good forest economy would obviously need to be much interested in local education. |
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http://www.tipiglen.dircon.co.uk/ecoscale.html
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| | Economies of Scale |
| | They define operating cost as in-plant production costs less taxes and capital costs, and they base their analysis on engineering cost estimates. | | | This result does not imply that all aspects of a firm's average costs decline with output, only that the cost of new equipment does. | | | Haldi and Whitcomb estimated separate cost relationships for 687 different types of common industrial equipment and found that costs do not increase in proportion to capacity even at very large capacities. |
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http://wps.aw.com/aw_carltonper_modernio_4/0,9313,1424938-content,00.html
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| | CITE - Economies of Scale parts 2-4 |
| | In particular, ES are external to a firm when a firm's unit costs decrease as the industry's (rather than the firm's) operations expand. | | | Increased unit costs may result from increased scale of operations. | | | DS of this nature are thus the result of increased coordination, motivation, and monitoring costs. |
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http://www.ssu.missouri.edu/ssu/agec/cite/scale/scale1.htm
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| | Economies of Scale - Notes |
| | These are economies made within a firm as a result of mass production. | | | Marketing economies made by spreading the high cost of advertising on television and in national newspapers, across a large level of output. | | | Managerial economies made in the administration of a large firm by splitting up management jobs and employing specialist accountants, salesmen, etc. |
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http://www.bized.ac.uk/learn/economics/firms/economies/notes.htm
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| | Economies of Scale and Returns to Scale |
| | Another way to characterize economies of scale is with a decreasing average cost curve. | | | Fixed costs are those costs that must be incurred even if production were to drop to zero. | | | Average costs, AC, are calculated as the total costs to produce output Q, TC(Q), divided by total output. |
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http://internationalecon.com/v1.0/ch80/80c020.html
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| | Economies of Scale and Scope |
| | Connection to Economies of scale: These days, consumers are calling for one-stop shopping (e.g., they want to be able to bank, invest, and insure with the same firm). | | | This means that a company can get more customers (and take advantage of economies of scale) if it sells more types of products; so it may be doing so not because its costs are lower with multiple products but because having multiple products leads to greater demand and, therefore, output is greater. | | | The smallest economically viable size of some input (usually physical or human capital) is very large; so there is a large setup cost (which is like a fixed cost item; however, since this is the long-run case, the cost may be increased, but not decreased). |
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http://www.sbm.temple.edu/~wholmes/Scl&Scp.htm
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| | Economies of Scale |
| | The generally accepted explanation for this is that AC initially declines because fixed costs are being spread over increasing output and then eventually increase as variable costs increase. | | | The minimum efficient scale (MES) is the minimum level on the average cost curve. | | | The paradigm shape of the cost curve is U-shaped. |
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http://www.msb.edu/faculty/homak/HomaHelpSite/WebHelp/Economies_of_Scale.htm
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| | Bambooweb: Economies of scope |
| | Whereas economies of scale refer primarily to supply-side changes (such as level of production), economies of scope refer to demand-side changes (such as marketing and distribution). | | | Not all economists agree on the importance of economies of scope. | | | See also: economics, distribution, marketing, economies of scale, production, costs, and pricing |
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http://www.bambooweb.com/articles/e/c/Economies_of_scope.html
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| | The Horizontal Boundaries of the Firm: Economies of Scale and Scope |
| | Long-run Economies of Scale: reductions in unit costs attributable to a firm switching from a low fixed/high variable cost plant to a high fixed/low variable cost plant. | | | Short-run Economies of Scale: reductions in unit cost attributable to spreading fixed costs for a plant of a given size. | | | Purchasing Economies: reductions in unit cost attributable to volume discounts. |
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http://www.louisville.edu/~bmhawo01/econpage/600/homework/chapter2summary.htm
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| | Economies of scale |
| | For example combining two completely unrelated businesses is likely to lead to higher costs (by adding an extra layer of management) and worse management (by reducing focus on each business and adding bureaucracy) - this is why conglomerates usually trade at a discount to their sum of parts valuation. | | | it is important to remember that economies of scale do not necessarily happen because a business is bigger. | | | A larger business is often able to do things more cheaply than a smaller one, other things being equal. |
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http://moneyterms.co.uk/economies-of-scale
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| | Essential Economics: Economies of Scale and Scope |
| | The marginal cost of adding one more user to the network is close to zero, but the resulting financial benefits may be huge because each new user to the network can then interact, trade with all of the existing members or parts of the network. | | | Financial economies of scale: Larger firms have access to credit facilities, with favourable rates of borrowing. | | | Marketing economies of scale and monopsony power : A large firm can spread its advertising and marketing budget over a much larger output and it can also purchase its factor inputs in bulk at discounted prices if it has monopsony power in the market (monopsony power is becoming important) |
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http://www.tutor2u.net/economics/content/essentials/economies_scale_scope.htm
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| | Economies of Scale - Activity |
| | For each of the five main sources of internal economies of scale (technical, commercial, financial, managerial, risk bearing) think of an example of how these could apply to the electronics/electrical good industry and explain your reasoning. | | | Psion did not have the risk bearing economies, the commercial economies or the financial economies to support any technical economies they might have been able to develop. | | | They can come from the massive resources that large companies have for research and development, not just in new products but in production methods. |
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http://www.bized.ac.uk/educators/16-19/economics/markets/activity/scale.htm
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| | Economies of Scale in Swine Manure Utilization |
| | Modern swine finishing facilities seek to maximize profits by achieving economies of scale, which minimize costs of production. | | | Our objective was to understand the effect of scale economies on manure costs and returns. | | | The high cost of concrete tanks created a significant economy of scale for manure management. |
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http://www.p2pays.org/ref/21/20986.htm
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| | Ross Mayfield's Weblog |
| | Economies of span are achieved by efficient coordination, or sequenced use, of assets. | | | Through the increase in volume of products or services of that single output, per-unit costs decline, and more customers will be attracted. | | | Through the increase in the number of outputs produced using the same asset, per-unit costs decline. |
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http://radio.weblogs.com/0114726/2002/10/21.html
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| | SSRN-Economies of Scale and Technological Development in Securities Depository and Settlement Systems by Heiko ... |
| | While smaller settlement service providers reveal high potential of economies of scale, larger institutions show an increasing trend of cost effectiveness. | | | European cross-border settlement seems to be more cost intensive than that on a domestic level, reflecting chiefly complexities of EU international securities settlement and differences in the scope of international settlement services providers. | | | The degree of such economies, however, differs by size of settlement institution and region. |
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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=355003
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| | Outsourcing - Maximizing the Benefits of Economies of Scale |
| | Application service providers (ASPs) also are able to generate significant savings through economies of scale. | | | This occurs when a supplier is able to find a labor source in another country that can do a comparable job at a lower cost. | | | Buyers who demand a high degree of customization destroy much of the value that economies of scale provide. |
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http://www.outsourcing-journal.com/may2001-insights.html
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| | What Are Economies Of Scale? |
| | Thus, while a decision to increase its scale of operations may result in decreasing the average cost of inputs (volume discounts), it could also give rise to diseconomies of scale if its subsequently widened distribution network is inefficient because not enough transport trucks were invested in as well. | | | Thus, when making a strategic decision to expand, companies need to balance the effects of different sources of ES and DS so that the average cost of all decisions made is lower, resulting in greater efficiency all around. | | | Thus, if the fast food chain chooses to spend more money on technology to eventually increase efficiency by lowering the average cost of hamburger assembly, it would also have to increase the number of hamburgers it produces a year in order to cover the increased technology expenditure. |
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http://www.investopedia.com/articles/03/012703.asp
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| | SSRN-A Note on Economies of Scale in Selected STUs by Sanjay Singh |
| | The prime objective of this paper is to empirically investigate the nature of scale economies in State Transport Undertakings (STUs) in India on the basis of a sample of medium- and large-size Indian states for which consistent data are available. | | | Evidence of higher costs in a non-competitive context, together with decreasing returns to scale, shows that the division of large monopolies into smaller firms covering different market segments for which they should compete would lead to a substantial amount of cost savings. | | | To examine this issue, a translog cost function is estimated jointly with factor share equations subject to required coefficient restrictions by using the method of 'Zellner's iterative' technique. |
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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=572368
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| | economy of scale: Definition and Much More From Answers.com |
| | Typically, a company that achieves economies of scale lowers the average cost per unit through increased production since fixed costs are shared over an increased number of goods. | | | Internal economies - The cost per unit depends on size of the individual firm. | | | Meaning #1: reduction in cost of production due to a large number of items produced |
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http://www.answers.com/topic/economies-of-scale
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| | Introduction |
| | In this study we argue that analysis of economies of scale may provide significant insights not only about IIT but also about the patterns of trade and access of international markets through multinational activity. | | | In recent years, increasing attention has been given to the trade of processed foods and some of its characteristics including intra-industry trade (Christodoulou, McCorriston and Sheldon) and the importance of foreign direct investment as a means of accessing foreign markets (Handy and Henderson, Handy). | | | Drawing on the firm strategy and industrial organization literature (Caves, Dunning), observed FDI patterns in food markets have been related to differential transaction costs related to market access (Goldsmith and Sporleder) or to the appropriability of rents embodied in intangible assets, such as intellectual property, image and brand name (Bjornson, Connor, Henderson et al.). |
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http://www.ssu.missouri.edu/SSU/AGEC/CITE/scale/scale.htm
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| | Economies Of Scale |
| | An examination of issues like economies of scale, economies of scope, and factor returns. | | | Offers procurement solutions by capitalizing on economies of scale. | | | Articles Ask Us Exam Prep Investing Game Tools Stock Ideas Newsletters Corporate Economies of Scale... |
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http://www.fewconomy.com/economiesofscale.html
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| | Tutor2u - Minimum Efficient Scale |
| | For example, in industries where massive networks or national distribution channels are required, the overhead costs relative to the running costs are likely to be high. | | | When the ratio of fixed to variable costs is very high, there is great potential for reducing the average cost of production. | | | The MES will vary from industry to industry depending on the nature of the cost structure in a particular sector of the economy. |
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http://www.tutor2u.net/economics/content/topics/buseconomics/mes.htm
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| | IB Note 3. Economies of Scale in the Long Run |
| | While the short-run phenomenon of overhead spreading should not be an ex ante decision criterion for the management of a company (marginal decision criteria are recommended), the long-run possibility of exploitating scale economies is one of the chief plant-location motivators of companies, especially those bent upon achieving growth through internationalization of their operations. | | | Taken together, a set of related short-run cost curves trace out a tangential long run average cost (LRAC) curve which may serve as a planning horizon device. | | | Such technological advances can be expected to favor global rather than multidomestic production location strategies. |
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http://facweb.furman.edu/~dstanford/ibnotes/ibnote1c.htm
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| | Free / Open Source Research Community (Online Papers) |
| | Throughout the study, the role of the pricing system within a market economy is stressed considering the specific characteristics of software as an economic good. | | | This paper analyzes a dynamic mixed duopoly in which a profit-maximizing competitor interacts with a competitor that prices at zero (or marginal cost), with the cumulation of output affecting their relative positions over time. | | | The purpose of this paper is to explore how three key challenges of venture management - the liabilities of newness and smallness of start-ups and market entry barriers - affect new ventures in OSS. |
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http://opensource.mit.edu/online_papers.php?&orderby=authors
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| | Economies of Scale |
| | Not only will you benefit from the reduced transaction costs of using the same parts source, but you will also be able to reap the benefits of the manufacturer's economies of scale. | | | Furthermore, with the current state of the economy, owners and dealers can expect an increase in product rentals as consumers shy away from equipment expenditures. | | | Due to the versatility of these products, many contractors opt to rent a cut-off machine that will meet the requirements of a particular job, rather than committing to the purchase of a single machine for their hard surface cutting needs. |
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http://rermag.com/mag/equipment_economies_scale
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| | False Economies of Scale |
| | The cost of materials is low with consultancy, and fairly static - the larger the supplier is, the more economically they will be able to source the materials from their own suppliers: a basic economy of scale and bulk-buying power. | | | When you pay for business services of any kind - particularly consultancy - you are paying for three different ingredients: materials, expertise and overheads. | | | The value of the expertise you receive is less quantifiable, and is more or less "the rest", once materials and overheads have been covered - it is the expertise, the "talent" that you are actually purchasing: the rest is usually the necessary, but inconsequential trappings that go with it. |
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http://www.entrepreneurnewz.com/entrepreneurnewz-19-20030624FalseEconomiesofScale.html
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| | Economies Of Scale |
| | Links and resources on costs such as average cost and marginal cost, the difference between short run and long run, and economies of scale....(Continue Reading) | | | The Benefits of Using an IT Consulting Company.s Services | | | Information and ideas on how the retail industry can benefit from business-to-business electronic commerce looks at the supply chain, economies of scale and other perks from B2B....(Continue Reading) |
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http://www.zdimag.com/ds6781.html
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| | Economies of Scale - CASE STUDY - CIO Magazine Aug 15,2002 |
| | Saddled with numerous disparate systems after an aggressive acquisition binge, MetLife needed to get integrated to cash in on its size and improve customer service. | | | During its 134-year history, CIO-100 honoree MetLife has grown not only in size but also in complexity, becoming so broad that Chuck Johnston, vice president of insurance information strategies at Stamford, Conn.-based Meta Group, describes it as the "GE of the insurance industry." | | | They are seeking economies of scale and looking for the best solutions within each of the brokers' existing systems. |
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http://www.cio.com/archive/081502/economies.html
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| | informationsphere.com: Economies Of Scale |
| | Scale economies at the level of a firm may also reflect elements of marketing and distribution costs. | | | Production exhibits economies of scale if average (per unit) costs fall as output increases, and diseconomies of scale if average cost increases as output increases. | | | Scale economies can occur at the level of individual plants or farms, in which case they generally reflect elements of the production process within a plant or farm. |
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http://www.informationsphere.com/html/3308.htm
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| | Jonathan Schwartz's Weblog |
| | Scale efficiencies and the resulting massive decrease in price allowed the government to bridge the power divide through rural electrification. | | | For a company that delivers value over the network. | | | Requiring some serious economy in provisioning and operation. |
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http://blogs.sun.com/roller/page/jonathan/20050312#on_the_granularity_of_computing
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| | Gains From Trade with Economies of Scale - A Simple Explanation |
| | The final conclusion of this numerical example is that when there are economies of scale in production then free trade, after an appropriate reallocation of labor, can improve national welfare for both countries relative to autarky. | | | The welfare improvement arises because by concentrating production in the economies of scale industry in one country, advantage can be taken of the productive efficiency improvements. | | | he main reason why the presence of economies of scale can generate trade gains is because the reallocation of resources can raise world productive efficiency. |
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http://internationalecon.com/v1.0/ch80/80c040.html
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| | Scale Economies |
| | For example, we increase the quantity of land, labor and capital in use, each by 20%. | | | For these economists, the key concept of economic growth is "economies of scale." Suppose all inputs are increased in the same proportion. | | | If economies of scale exist in the economy as a whole, and if they are quite strong, they might overcome the limited quantity of land and allow continuous increases in the division of labor, the productivity of labor, and economic growth. |
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http://william-king.www.drexel.edu/top/prin/txt/gro/gro21.html
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| | OECD Glossary of Statistical Terms - Product specific economies of scale |
| | Such economies generally arise by avoiding the costs of interrupting production and re-tooling that is required in order to produce different products with the same machinery and equipment. | | | In a multi-product firm or plant, product specific economies are often realized by specializing in the manufacture of one or a few products over a larger scale of output. | | | Product specific economies are often the basis for specialization agreements. |
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http://cs3-hq.oecd.org/scripts/stats/glossary/detail.asp?ID=3527
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| | Economies Of Scale |
| | Smaller companies can manage fixed overhead better than larger companies | | | Smaller companies can manage quality and customer relationships better | | | If we take a look at the current state and recent past of the contracting world, it would appear that the venerable concept of economies of scale does not apply. |
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http://svconline.com/mag/avinstall_economies_scale/index.html
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| | Economies of Scale |
| | A gradual quickening of pace and an increase of activity lead to a varied and more gentle version of the opening. | | | Economy indeed - befitting the work's dedicatee, a distinguished Scottish Economist and Cambridge-based Nobel prizewinner. | | | Closely argued and organically developed, it was based on a scale from the composer's first string quartet, and resolved - to carthartic effect - in the B major tonality it had always been striving towards. |
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http://www.maxopus.com/works/econ.htm
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| | Knowledge and Economies of Scale |
| | One is that the set up cost, u, for an algorithm is like a fixed cost. | | | The other source of economies of scale is that parts of good programs might have common elements and, when they are merged, redundant parts can be eliminated so that the complexity grows by less than the sum of the complexities of the respective parts. | | | This means we need only pay the cost u one time and all our algorithms can run on the social computer. |
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http://www.beje.decon.ufpe.br/vany/node8.html
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| | Economies of Scale |
| | Divide work get benefits of specialization (lower costs) | | | Reasons why firms typically have economies of scale as they begin production |
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http://www.sba.muohio.edu/powerpoint/chapter7/TSLD052.HTM
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| | Informational Economies of Scale |
| | Abstract: The theory of the firm under uncertainty is examined in the context of several examples which illustrate that opportunities to purchase technological information at some cost in resources may induce economies of scale even though the technology of physical production has no economies of scale. | | | The two effects combined lead to an unbounded optimal scale of operations when information acquisition is adjusted optimally. | | | Better information justifies a higher scale of operations and vice versa. |
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http://www.rje.org/abstracts/abstracts/1975/Spring_1975._pp._184_195.html
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| | Climate Change, Oil and Security: Connecting the Dots: Worldwatch Live Online Discussion |
| | The combination of a guaranteed market and long-term minimum payments has reduced investment risks, making it profitable to invest in renewable technologies and easier to obtain financing. | | | By driving demand for renewable energy, such laws have attracted private investment for research and development, have spread the cost of technology advancement and diffusion relatively evenly across populations, and have enabled the scale economies in production and the experience in installation, operation and maintenance required to dramatically reduce costs of renewable technologies and generation. | | | Janet will be answering your questions related to her State of the World 2005 chapter, "Changing the Oil Economy." Trends, facts, and other resources related to State of the World 2005 can be found in our Global Security online feature. |
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http://www.worldwatch.org/live/discussion/105
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| | ODLIS: Online Dictionary for Library and Information Science |
| | If marginal cost (cost of producing an additional unit) is less than average cost, an economic incentive exists to produce additional output. | | | Diseconomies of scale occur when average cost increases as output increases. | | | A lower grade of covering material is used and the color may be selected by the binder, or from a limited number of choices. |
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http://lu.com/odlis/odlis_e.cfm
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| | Measurement of Economies of Scale in Victorian Credit Unions |
| | Measurement of Economies of Scale in Victorian Credit Unions | | | Significant diseconomies of scale are found for some subsamples of small credit unions but for most subsamples the null hypothesis of constant returns to scale is not rejected. | | | Senior Author, Department of Accountancy and Law, Victoria University of Technology (Footscray Campus), PO Box 14428 MCMC, Melbourne VIC 8001. |
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http://www.agsm.unsw.edu.au/eajm/9506/brown.old
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| | economies of scale |
| | Reductions in the cost of producing a product as the scale of output increases. |
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http://www.abc.net.au/money/vault/glossary/gloss8/scale.htm
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| | Economies of Scale |
| | Economies of scale - long-run cost curve declines as Q increases | | | Diseconomies of Scale -long-run cost curve increases as Q increases | | | Minimum Efficient Scale output at which a firm takes full advantage of economies of scale |
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http://www.csuchico.edu/~shockley/syllabi/production/tsld026.htm
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| | ECONOMY OF SCALE |
| | For example, lower production cost of an automobile due to production of a large number of cars of the same type is due to economy of scale. | | | There may also exist a DISECONOMY OF SCALE where the increased size contributes to an increase in unit cost. | | | Relative saving realized when the size of a plant, enterprise, etc., is increased. |
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http://pespmc1.vub.ac.be/ASC/ECONOM_SCALE.html
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| | Economies of Scale in the Floriculture Industry |
| | Keywords: duality, economies of scale, floriculture, nonprice variables | | | Using a normalized quadratic cost function, economies of scale and input elasticities are estimated. | | | This paper investigates the cost structure of the floriculture industry in the United States. |
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http://ideas.repec.org/a/jaa/jagape/v35y2003i3p497-507.html
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